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- Subject
- Marketeconomics-mcqs › market
- Published
- 31 May 2019
- Last updated
- 28 May 2026
Taxes introduce a gap between the selling price and buying price, which stops the price mechanism from balancing which two economic factors?
Multiple choice question for Market. Select an option, then review the explanation below.
Explanation
Taxes create a discrepancy between the price sellers receive and the price buyers pay, preventing the market from aligning marginal costs with marginal benefits, which is essential for efficient resource allocation.
More Market MCQs
Practice related questions from the same subject.
- 1.Broadcasting firms use satellite TV subscriptions and signal detection tools primarily to combat which issue?
- 2.Which of the following is a classic example of a public good?
- 3.Which of the following factors can lead to market failure?
- 4.When a neighbor burns yard debris and smoke enters your home, what type of externality does this represent?
- 5.Why is a competitive equilibrium considered Pareto efficient?