Economics 0455 · IGCSE · Market failure

Market failure — practice question

For certain illnesses, wearing a face mask is beneficial because it may stop people from becoming infected. However, not everyone is prepared to wear face masks. Using the statement above, why would the free market lead to an inefficient allocation of face masks?

  • AConsumers in the free market only consider private costs and benefits.
  • BFace masks are non-rival and non-excludable.
  • CThere is abuse of monopoly power by the producer of face masks.
  • DThere is perfect information in the free market.

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