Markets fail because:

CA Foundation · Business Economics · MTP · January 2026
Markets fail because:
(A) A. Externalities are not accounted for in pricing and quantity decisions of firms
(B) B. Most often the prerequisite of competition is unlikely to be present in an economy
(C) C. Prices fail to reflect the true costs and benefits to the society
(D) D. All the above

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. All the above

Topics: Public Finance

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