College
Essay
Miscellaneous
Pages 6 (1506 words)
Download 0
Market failure is a concept, which holds that there is inefficient allocation of goods and services by a free market. Market failure can better be explained as a situation in which an individual or single entity's actions towards fulfillment of its own interests lead to unsatisfactory outcomes for the society on the whole.

Introduction

This can lead to inefficiency due to imperfect competition, which can take many different forms, such as monopolies, monopsonies, cartels, or monopolistic competition, if the agent does not implement perfect price discrimination. OPEC (oil cartel in Middle East is an example of this).
Second, the actions of an agent can have externalities, which are innate to the methods of production, or other conditions important to the market. An externality occurs when an economic activity causes external costs or external benefits to third party stakeholders who did not directly affect the economic transaction. In a competitive market, the existence of externalities would mean that either too much or too little of the good would be produced and consumed in terms of overall cost and benefit to society.
Finally, some markets can fail due to the nature of certain goods, or the nature of their exchange. For instance, goods can display the attributes of public goods or common-pool resources, while markets may have significant transaction costs, agency problems, or informational asymmetry. In general, all of these situations can produce inefficiency, and a resulting market failure.
"One cause of market failure is the limited nature of property rights. ...
Download paper
Not exactly what you need?

Related papers

Psychological Therapies and Youth
In this chapter, the need to actually find the right reason and the right procedure to help these young individuals survive their youth. All the different situations that they are to face must be well prepared for. Besides this, it should also be assured that the decision that they make is well guided so as to ensure their decisions would have better future results. IT could not be denied that not…
The Effectiveness Of Different Training Methods Commonly Used To Increase An Athletes Speed
Besides discussing the trining methods, I will emphsize the importnce nd subtle elements of thletes speed.…
Management of Processes
However, the pressure of globalization and foreign competition had a big impact on the revenues of these companies (Emmons, Garry 2006). Lack of vision, corporate bureaucracy, bloated product lines or overcapacity, and lack of proper business management process started pulling down the sales of the American auto majors.…
The Importance of Processes in Reverse Logistics
least cost and highest efficiency). A reverse logistics operation is considerably different from forward logistics. It must establish convenient collection points to receive the used goods from the final customer or remove assets from the supply chain so that more efficient use of inventory / material overall can be achieved. It requires packaging and storage systems that will ensure that most of…
Reviewing Progress
Listening has more to do with the mind that the ear. These changes were necessary to make because if a person does not readily listen to his peers, subordinates, higher ups etc. he will never benefit from what they are trying to say to him. A person should always listen more than he speaks.…
B200 TMA02
This can lead to inefficiency due to imperfect competition, which can take many different forms, such as monopolies, monopsonies, cartels, or monopolistic competition, if the agent does not implement perfect price discrimination. OPEC (oil cartel in Middle East is an example of this).…
The Awareness of Mental Health among the American Public
The total number of death cases in the Civil War is almost the same as the death cases in almost all other wars combined. Furthermore, more than one out of every five white men who participated in the war died (Vinovskis 1990, as cited in Costa n.d.).…