Question

Suppose a firm that produces for this market employs a private security force that makes town residents, many of whom have no business with the company, feel safer. This scenario is characterized bymarket power , which is an example of

Answer 1

Answer:

Externality, market failure

Explanation:

Note: The full question is attach as picture below

This scenario is characterized by externality which is an example of market failure.

At the intersection of demand and supply curves, value to consumers is equal to cost to sellers.  When people who are not involved in the business, feel safer, there exists positive externality which results in market failure and the need for government intervention arises.