Which of the following best explains why markets fail to function fairly when a few large companies produce g…

Question

Which of the following best explains why markets fail to function fairly when a few large companies produce goods bought by millions of scattered consumers?

A. Consumers lack the time and awareness to compare products across different companies.
B. Large companies can use their wealth and reach to manipulate markets, suppress information, and spread false claims.
C. Scattered consumers tend to buy lower-quality goods because they cannot afford better options.
D. Governments deliberately keep consumer protection laws weak to encourage industrial growth.

Accepted Answer

## Model Answer **Answer: B** Markets fail to function fairly because large companies, with huge wealth, power and reach, can manipulate markets, pass false information through media, and exploit scattered individual consumers who are in a weak position. *Source: The Consumer in the Marketplace, Chapter 5* --- ## Explanation The passage explicitly states: *"These companies with huge wealth, power and reach can manipulate the market in various ways. At times false information is passed on through the media."* Option B directly reflects this. Options A, C, and D are either not supported by or contradict the passage. Examiners expect you to identify the answer that matches the textbook's exact reasoning.

Social Science (087) — AI-generated practice question