Market Failure Concept, Causes and Solutions

The concept of mart failure, its main causes and solutions available are of reside here.
The concept of commercialize failure has very much to do with taste the competitive market counterpoise; that is, the ideal market where economic efficiency and resource allocation are at their sense of balance.
Economist, Alfred Marshall, was the first to come up with the ideal market sit down as a theoretical benchmark in understanding real world market economies; hisDemand and Supply trim back.
(Dasgupta, P., 2007, p. 73)
Fig. 1.0 Demand and Supply Curve.

According to this model, the ideal market proportionality is the point of intersection between the Supply and Demand Curves. It is at this point (market equilibrium point) that the market demand reachs the market confer (Dasgupta P., 2007, p. 73), and economic efficiency and resource allocation are at their best. What this means is, firms will supply enough to meet consumer demands and their issue costs; whilst consumers will demand enough to satisfy their manipulation needs at a price that they can afford. there is no surplus or deficit of supply or demand; it is equal. The factors in the process of production, distribution and consumption of goods or services are also verifiable, justified and equal.



It is against this market equilibrium point which economists gouge the state of real world markets.
commercialize failure is the term used when the competitive market equilibrium in non reached or is not present when study real world markets and the ideal market. According to Hubbard, Garnett, Lewis and OBrien (2010, p.135), market failure is the situation when the market fails to produce, economically efficient direct of output, where marginal benefit of consumption does not equal marginal cost of production in a accustomed arrangement of trade. In short, the poor or non-existent allocation of resources does not maximise the best economic outcome for consumer and producer in the market place and, in turn,...If you want to get a full essay, order it on our website: Orderessay



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