1.3 Flashcards
1
Q
What is Market failure
A
Occurs when the market is unable to efficiently allocate scarce resources to meet the needs of the society
2
Q
Why is market failure always occurring
A
Allocative inefficiency- use resources to produce too much or too little
3
Q
Why is the market mechanism sometimes inefficient In allocating scarce resources.
A
Information gap
Externalities
Under provision of public good
