Answer: True
Step-by-step explanation:
At a socially optimal market outcome, the price of goods and services would incorporate all the costs and benefits of producing it including the third party benefits and costs known as Externalities.
When market failure occurs, it is because individual actions have resulted in an inefficient allocation of resources which means that the goods and services on offer will not adequately include the costs of producing gods and services. This is not a socially optimal outcome so the statement above is true.