solution to market failures Flashcards
1
Q
what r the 3 solutions to market failure?
A
Private market solution
government imposed solutions
collective action solutions
2
Q
Private market solutions
A
The private markets come together to emerge solutions between themselves. (prices & supply)
3
Q
government imposed solutions
A
when solutions do not come from the market itself THEN governments can enact legislation and take other measures as a response to a market failure. (tax, subsidies, laws)
4
Q
collective action solutions
A
consumers and producers can privately agree to limit consumption and enforce rules among themselves to overcome a market failure.
