Market failure refers to a situation in which there is an inefficient allocation of goods and services in the market. Inefficient allocation takes place when pure self-interest drives the maximizing behavior of economic agents.
Market failure is attributed to the existence of externalities, common property resources, public goods, and asymmetric information.
Market failure often leads to government intervention designed to drive the market towards efficiency.
Market failure refers to a situation in which there is an inefficient allocation of goods and services in the market. Inefficient allocation takes place when pure self-interest drives the maximizing behavior of economic agents.
Market failure is attributed to the existence of externalities, common property resources, public goods, and asymmetric information.
Market failure often leads to government intervention designed to drive the market towards efficiency.
Activity
Khan Academy: “Positive Externalities”
Principles of Microeconomics: “Chapter 6, Section 3: Market Failure”
Khan Academy: “Rent Control and Deadweight Loss”
Khan Academy: “Minimum Wage and Price Floors”
Khan Academy: “Taxation and Dead Weight Loss”
Khan Academy: “Percentage Tax on Hamburgers”
Khan Academy: “Taxes and Perfectly Inelastic Demand”
Khan Academy: “Taxes and Perfectly Elastic Demand”
Khan Academy: “Negative Externalities”
Khan Academy: “Taxes for Factoring in Negative Externalities”
Khan Academy: “Tragedy of the Commons”
Developer