Types of market failure Flashcards
1
Q
What is the definition of market failure?
A
the market is unable to efficiently allocate scarce resources to meet the needs of society - allocative inefficiency
2
Q
4 causes of market failure
A
Externalities
Missing Markets
Under-provision of public goods
Information gaps
3
Q
Complete market failure meaning
A
Occurs when there is a missing market
4
Q
Partial market failure meaning
A
the market exists but there is a misallocation of resources
