Question

market failure is ________.

a market that does not have allocative efficiency

a market that has a gross deficiency in supply

a market that has a gross deficiency in demand

a market that has no customers

Explanation:

Market failure occurs when the market fails to allocate resources efficiently, meaning it doesn't achieve allocative efficiency (where marginal cost equals marginal benefit for optimal resource use). A gross deficiency in supply or demand, or no customers, are not the core definitions of market failure.

Answer:

A. a market that does not have allocative efficiency