Respuesta :
Answer:
much more likely;
There is only one car dealership in a small town, giving the dealership the ability to influence the price of cars. - Market power
A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons. - Externality
Explanation:
Property rights are an incentive for individuals to create goods that are needed on the market. In other words, when a discrepancy between demand and supply occurs on a specific market, entities, businesses or individuals that create the goods are motivated to meet market needs through enforced property rights.
On the other hand, when there is a lack of property rights that regulate the market, market failures occur. Two common types of market failures include market power and externalities.
The car dealership example shows market power in practice, as the reigning company can dictate car prices.
The second example shows an externality, as there is evident influence (cost or benefit) on the third party, which they cannot change. People are affected (negatively) by smoke they did not create.
Loggers are much likely to under supply wood to the market if property rights are enforced.
There is only one car dealership in a small town, giving the dealership the ability to influence the price of cars. - this would be classified as market power
A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons.- this would be classified as an externality
Property rights define who legally owns a property. It also defines how the property can be used.
If property rights are enforced, logger would not be able to indiscriminately fell wood. This would reduce the quantity of wood that can be sold in the market.
A firm has market power when it is able to raise prices above the price that would prevail in a competitive environment.
The car dealership is an example of a monopoly.
A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.
Externality is when production or consumption activities have effects on third parties not involved in the activity
Smoking generates negative externality
A good has negative externality if the costs to third parties not involved in production or consumption is greater than the benefits.
People around a smoker are in danger of inhaling harmful second-hand smoke
To learn more about market failure, please check : https://brainly.com/question/13397902?referrer=searchResults
