Asked by
Katie Dickens
on Oct 08, 2024Verified
People enjoy outdoor holiday lighting displays and would be willing to pay to see these displays but can't be made to pay.Because those who put up lights are unable to charge others to view them,they don't put up as many lights as people would like.This is an example of a:
A) negative externality.
B) supply-side market failure.
C) demand-side market failure.
D) government failure.
Outdoor Holiday Lighting
Decorative lighting used externally on buildings and in gardens to celebrate holidays, especially festive periods like Christmas.
Supply-Side Market Failure
Situations where the production or supply of a good or service leads to insufficient or excessive production, often due to externalities or lack of competition.
Demand-Side Market Failure
Demand-side market failure occurs when demand curves do not reflect consumers' full willingness to pay for a good or service, often due to externalities or public goods.
- Examine the shortcomings in the market due to supply-side and demand-side factors.
- Comprehend how external factors influence the efficiency of markets.
Verified Answer
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Learning Objectives
- Examine the shortcomings in the market due to supply-side and demand-side factors.
- Comprehend how external factors influence the efficiency of markets.