Chapter 16: Market Failure
- Created by: Sin Heng
- Created on: 21-11-19 12:55
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What are the 2 ways which result from market failure?
Partial market failure and missing market
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Define 'partial market failure'
When a market for a good exists but there is an over- or underproduction of the good
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Define 'missing market'
A market where the market mechanism fails to supply any of a good
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Define 'complete market failure'
When a market fails to supply any of a demanded good, therefore creating a missing market
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How do public goods (defence, street lighting) become under-provisioned?
Individuals have a large incentive to not pay for…
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