Loggers are much ________ likely to supply wood to the market if property rights are not 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

A single grocery store is the only source of food in a small town, giving the store the ability to influence the price of food.

A manufacturing plant dumps chemical waste into a nearby river, poisoning the water supply for a small town downstream.