Define what is meant by 'market failure' and show the circumstances in which this might occur.

Question

Quizplus · Accepted Answer

The Answer is Describe the operation of market forces in terms of allocation, production, and distribution decisions.
Show how, in relation to allocation, market failure might occur in not providing merit goods, public goods, or in failing to take into account externalities.
Show how there may be problems in production as a result of monopolies, destructive competition, market instability, long-term projects, and risk and uncertainty.
Show how distribution issues are important, and that if there is inequity then this is a problem.

Define What Is Meant by 'Market Failure' and Show the Circumstances