Property rights and market failures Bakers are much likely to supply pastries to the market if property rights are enforced. In the presence of market failures, public policy can improve economic efficiency Classify the source of market failure in each case listed.
Market Failure Market Power Externality
There is only one car dealership in a small town, giving the dealership the ability to influence the price of cars.
A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons.