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6 marksMarket Failure

CAPE Economics Unit 1 · 2018 · Paper 2 · Question 2(c)

With the aid of a well-labelled diagram, explain how negative externalities lead to market failure.

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Other parts of this question

  1. 2(a)List FOUR measures used by the government to control market failure.[4 marks]
  2. 2(b)Explain the role of advertising in monopolistic competition and perfect competition.[6 marks]
  3. 2(d)With the aid of a diagram, analyse the pricing and output decision of the monopolist.[9 marks]

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