What is a market failure? Group of answer choices It refers to a situation where an entire sector of the economy (for example, the airline industry) collapses because of some unforeseen event. It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal private cost. It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal social cost. It refers to a breakdown in a market economy because of widespread corruption in government.

The correct answer is letter "C": It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal social cost.

Explanation:

Market failure occurs when the quantity of the product demanded by the consumer does not equal the quantity supplied by the provider. It prevents consistent equilibrium. Market failure may be complete or partial. There is no supply for a product at all in complete market failure.

However, market failure is often linked to partial market failure. Under this scenario, the price and quantity of the goods do not correspond to the point at which the supply and demand curves of the good intersect. This results in an inefficient allocation of resources. There, marginal social benefits and social costs are unmatched.