Market Failure
- Created by: Glossy94
- Created on: 06-05-15 10:23
View mindmap
- Market failures
- Market failure occurs when the free market, left alone, fails to deliver an efficient allocation of resources. The result is a loss of economic and social welfare.
- Markets fail because:
- 1. Negative externalities(e.g. effects of pollution).
- 2. Positive externalities (e.g. the provision of education)
- 3.Imperfect information.
- 4. The private sector in free markets being unable to supply public goods.
- 5. Market dominance by monopolicies can lead to under production and higher prices.
- 6. Immobility of factors of production.
- 7.Equality issues.
Comments
No comments have yet been made