In the context of market failure, externalities lead to:
A. Divergence between private and social costs or benefits
B. Perfect competition
C. Zero role for government intervention
D. Efficient market outcomes
Answer: Option A
Solution (By JKSSB Mock Tests)
Externalities cause a divergence between private and social costs (or benefits), leading to over- or under-production relative to the socially optimal level.
Explanation:
The gig economy refers to labour markets characterised by short-term contracts or freelance work, frequently organised through online platforms that match workers with individual tasks or projects.
Explanation:
Monopsony refers to a market with a single buyer. While monopsony is a market structure, the option 'Monopsony of labour only' incorrectly restricts it. Standard market structures are perfect competition, monopoly, monopolistic competition and oligopoly.
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