1.3.1 Types of market failure Flashcards
1
Q
What is market failure?
A
When the free market fails to allocate resources efficiently.
2
Q
Causes of market failure:
A
- Positive externalities
- Negative externalities
- Public goods
- Merit goods
- De-merit goods
- Information failures
- Monopolies
- Immobility of factor inputs
3
Q
What is Regulatory Capture?
A
Where regulators act in a favourable way to the firm they are regulating (due to manipulation of data)
