:In
what ways will the price mechanism fail to carry out this function efficiently?
Use
price...

Question

:In
what ways will the price mechanism fail to carry out this function efficiently?
Use
price ceiling and price floor to support your answer.

Robert · Accepted Answer

A situation in which a market left on its own fails to carry out its function 
of efficient allocation of resources is called market failure. Market power and 
externalities are examples of a general phenomenon called market failure, the 
inability of some unregulated markets to allocate resources efficiently. All 
analysis in the economics assumes that market is perfectly competitive. In the 
world, however, competition is sometimes far from perfect. In some markets,

:In what ways will the price mechanism fail to carry out this function efficiently? Use price ceiling and price floor to support your answer.

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