{"id":138,"date":"2024-05-29T23:13:10","date_gmt":"2024-05-29T23:13:10","guid":{"rendered":"https:\/\/course.oeru.org\/miec102\/?page_id=138"},"modified":"2024-05-29T23:13:10","modified_gmt":"2024-05-29T23:13:10","slug":"when-markets-fail","status":"publish","type":"page","link":"https:\/\/course.oeru.org\/miec102\/learning-pathways\/markets-and-individual-maximizing-behaviour\/when-markets-fail\/","title":{"rendered":"When markets fail"},"content":{"rendered":"<div id=\"content\" class=\"mw-body container\" role=\"main\">\n<div class=\"row\">\n<div class=\"col-md-12\">\n<div class=\"panel\">\n<div class=\"panel-body\">\n<div id=\"bodyContent\">\n<div id=\"mw-content-text\" lang=\"en\" dir=\"ltr\" class=\"mw-content-ltr\">\n<p>\n<\/p>\n<div class=\"thumb tleft\">\n<div class=\"thumbinner thumbnail\" style=\"width:254px;\"><a href=\"https:\/\/wikieducator.org\/File:1929stockcrash.jpg\" class=\"image\"><img loading=\"lazy\" decoding=\"async\" alt=\"1929stockcrash.jpg\" src=\"\/\/wikieducator.org\/images\/b\/ba\/1929stockcrash.jpg\" width=\"252\" height=\"252\" class=\"thumbimage img-responsive\"><\/a>  <\/p>\n<div class=\"thumbcaption\"><\/div>\n<\/div>\n<\/div>\n<p>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.\n<\/p>\n<p>Market failure is attributed to the existence of externalities, common property resources, public goods, and asymmetric information.\n<\/p>\n<p>Market failure often leads to government intervention designed to drive the market towards efficiency.\n<\/p>\n<div style=\"clear:both\"><\/div>\n<div class=\"panel iDevice\">\n\t<div class=\"panel-heading idevice-heading\">\n\t\t<div>\n\t\t\t<img decoding=\"async\" class=\"pedagogicalicon\" alt=\"activity\" src=\"https:\/\/course.oeru.org\/miec102\/wp-content\/themes\/oeru_course\/idevices\/Icon_activity.png\">\n\t\t<\/div>\n\t\t<div>\n\t\t\t<h2>Activity<\/h2>\n\t\t<\/div>\n\t<\/div>\n\t<div class=\"panel-body\">\n\t\t<div class=\"col-md-12\">\n\t\t\t<\/p>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/externalities-topic\/v\/positive-externalities\">Khan Academy: &#8220;Positive Externalities&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about positive externalities.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/saylordotorg.github.io\/text_principles-of-microeconomics-v2.0\/s09-03-market-failure.html\">Principles of Microeconomics: &#8220;Chapter 6, Section 3: Market Failure&#8221;<\/a>\n<\/p>\n<ul>\n<li> Read this section for a more detailed look at the topic of market failure. Attempt the &#8220;Try It\u201d problem before checking your answer.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/deadweight-loss-tutorial\/v\/rent-control-dead-weight-cost\">Khan Academy: &#8220;Rent Control and Deadweight Loss&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about rent control and deadweight loss.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/deadweight-loss-tutorial\/v\/minimum-wage-and-price-floors\">Khan Academy: &#8220;Minimum Wage and Price Floors&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about minimum wage and price floors.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/deadweight-loss-tutorial\/v\/taxation-and-dead-weight-loss\">Khan Academy: &#8220;Taxation and Dead Weight Loss&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about taxation and dead weight loss.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/deadweight-loss-tutorial\/v\/percentage-tax-on-hamburgers\">Khan Academy: &#8220;Percentage Tax on Hamburgers&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about a percentage tax on hamburgers.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/deadweight-loss-tutorial\/v\/taxes-and-perfectly-inelastic-demand\">Khan Academy: &#8220;Taxes and Perfectly Inelastic Demand&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about taxes and perfectly inelastic demand.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/deadweight-loss-tutorial\/v\/taxes-and-perfectly-elastic-demand\">Khan Academy: &#8220;Taxes and Perfectly Elastic Demand&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about taxes and perfectly elastic demand.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/externalities-topic\/v\/negative-externalities\">Khan Academy: &#8220;Negative Externalities&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about negative externalities.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/externalities-topic\/v\/taxes-for-factoring-in-negative-externalities\">Khan Academy: &#8220;Taxes for Factoring in Negative Externalities&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about taxes for factoring in negative externalities.\n<\/li>\n<\/ul>\n<p><a rel=\"nofollow\" class=\"external text\" href=\"https:\/\/www.khanacademy.org\/economics-finance-domain\/microeconomics\/consumer-producer-surplus\/externalities-topic\/v\/tragedy-of-the-commons\">Khan Academy: &#8220;Tragedy of the Commons&#8221;<\/a>\n<\/p>\n<ul>\n<li> Watch this video about the tragedy of the commons.\n<\/li>\n<\/ul>\n<p>\n<\/p>\n<p>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n<p><!-- \nNewPP limit report\nCPU time usage: 0.020 seconds\nReal time usage: 0.027 seconds\nPreprocessor visited node count: 86\/1000000\nPreprocessor generated node count: 817\/1000000\nPost\u2010expand include size: 7112\/2097152 bytes\nTemplate argument size: 5830\/2097152 bytes\nHighest expansion depth: 7\/40\nExpensive parser function count: 0\/100\n--><\/p>\n<p><!-- Saved in parser cache with key we_en-mw_:pcache:idhash:177012-0!*!*!*!*!2!* and timestamp 20240529231310 and revision id 1003565\n -->\n<\/div>\n<div class=\"visualClear\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"row\">\n<div class=\"col-md-12\">\n<ul class=\"pager\">\n<li class=\"previous\">\n            <a href=\"\/miec102\/learning-pathways\/markets-and-individual-maximizing-behaviour\/maximizing-in-the-market-place\">\u2190 Previous<\/a>\n          <\/li>\n<li class=\"next\">\n            <a href=\"\/miec102\/learning-pathways\/markets-and-individual-maximizing-behaviour\/income-inequality\">Next \u2192<\/a>\n          <\/li>\n<\/ul><\/div>\n<\/p><\/div>\n<div id=\"wenote-ids\"><script type='text\/javascript' id='wenotes-ids'>\n    var WEnotesSite = \"https:\/\/wikieducator.org\";\n    var WEnotesPath = \"\/Microeconomics_production_and_consumption\/When_markets_fail\";\n    var WEnotesSiteID = \"0e3d258fbd36841f92259eefcd41d5e9\";\n    var WEnotesPathID = \"53bbc8ff2c77029e00ecccaec29271e0\";\n    var WEnotesIDs = { site: \"https:\/\/wikieducator.org\", path: \"\/Microeconomics_production_and_consumption\/When_markets_fail\", site_id: \"0e3d258fbd36841f92259eefcd41d5e9\", path_id: \"53bbc8ff2c77029e00ecccaec29271e0\" };\n<\/script><\/div>\n<\/div>\n<footer><\/footer>\n","protected":false},"excerpt":{"rendered":"<p>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 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":132,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-138","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/course.oeru.org\/miec102\/wp-json\/wp\/v2\/pages\/138","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/course.oeru.org\/miec102\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/course.oeru.org\/miec102\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/course.oeru.org\/miec102\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/course.oeru.org\/miec102\/wp-json\/wp\/v2\/comments?post=138"}],"version-history":[{"count":1,"href":"https:\/\/course.oeru.org\/miec102\/wp-json\/wp\/v2\/pages\/138\/revisions"}],"predecessor-version":[{"id":139,"href":"https:\/\/course.oeru.org\/miec102\/wp-json\/wp\/v2\/pages\/138\/revisions\/139"}],"up":[{"embeddable":true,"href":"https:\/\/course.oeru.org\/miec102\/wp-json\/wp\/v2\/pages\/132"}],"wp:attachment":[{"href":"https:\/\/course.oeru.org\/miec102\/wp-json\/wp\/v2\/media?parent=138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}