What is market failure and why does it occur in an economy, Business Economics

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QUESTION

(a) Explain the relationship between scarcity, choice and opportunity cost.

(b) What is market failure and why does it occur in an economy?

(c) Differentiate, using appropriate examples and diagrams, between fixed cost and total cost.

(d) Discuss to what extent a large firm is able to benefit from economies of scale in the television manufacturing industry.

 


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