Chapter 16: Market Failure

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  • Created by: Sin Heng
  • Created on: 21-11-19 12:55
  1. What are the 2 ways which result from market failure? 

Partial market failure and missing market 

 

  1. Define 'partial market failure' 

When a market for a good exists but there is an over- or underproduction of the good 

 

  1. Define 'missing market' 

A market where the market mechanism fails to supply any of a good 

 

  1. Define 'complete market failure' 

When a market fails to supply any of a demanded good, therefore creating a missing market 

 

  1. How do public goods (defence, street lighting) become under-provisioned? 

Individuals have a large incentive to not pay for

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