First 97 words of the document:
Definitions Unit 4b
4.3.1b: Do Markets Always Work?
What Market Failure Means
Market Failure situations where free market forces have led to an inefficient allocation of
Merit Goods socially desirable underproduced if left to the free market customers will be
unwilling to pay private costs e.g. healthcare, education.
Public Goods cannot be efficiently produced by the private sector available to all freerider
problem businesses cannot charge for them.
Equity fair distribution of income and wealth, `fair' dependent on political opinion.
What Are Externalities?