Give Three (3) Examples Of Market Failure And List The Main Types Of Measures That Governments Can Take To Address Them.

Running Header : EXAMPLES OF MARKET FAILUREExamples of Market Failure and the master(prenominal) Types of MeasuresThat Government puke Take to Address Them Name University of tie-in (Name of Professor SubjectExamples of Market Failure and the Main Types of MeasuresThat Government Can Take to Address ThemEconomics is the allocation of scarce resources efficiently . If these resources ar not allocated efficiently , then mart failure exists Monopoly , mankind goods , oligopoly , incomplete information or information asymmetry , monopsony , and externalities are just among the relieve oneselfs of market failure . If either of these takes place thence government must intervene to regain a dead competitive marketIn economics , monopoly takes place when thither is only unitary seller of a particular commodity . Due to the deprivation of competitors and /or substitutes (alternatives ) for these goods , producer has the power and control over the footing of the commodity . The producer is the one who decides which take aim of demand to pander and how much price to charge . Thus they charge higher(prenominal) price compared when in that location is perfect competition in the market which is not fair for consumers . exactly there are lot were the government use monopoly for itself . However , monopoly may also cause deadweight loss . Deadweight loss is the loss of economic efficiency when the proportionality for the commodity is not Pareto optimal or it is not affirmable to improve the production of that commodity without affecting negatively opposite production . Economic efficiency is said to be having a Pareto improvement when consumers who hold back more peripheral benefit than marginal costs buys the product and those who have less MB than their MC are not buying the good . Deadweight loss occurs when there is economic loss because other way around drop dead .

Monopoly also causes the producer not to improve the goods since he knows that there are no other competitors and there are no alternatives , therefrom people have no choice merely to consume the good regardless of the benefit that they will have On the other hand , monopoly also has positive effect . Though considered as a theoretical case , the ingrained monopoly is said to be one of the benefits that monopoly gives which is characterized by long do average cost curves . Also monopoly has the profits needed to infix and develop new line of products , instead of just sticky in improving one kind of product . vane externalities may also exist in monopoly which gives an advantage in having only one producer of a commodity . If monopoly exists with a private firm , the government may establish other firm producing the same commodity to promote competition and thus dividing the power of the first firmPublic ownership is when at any level of government , there exist an industry or keep company which is owned by the government . There are commodities that piece of assnot be provided efficiently by the private sector thus the institutionalize of production or provision is shifted to the government A monopoly can be outplayed when competition arise thus forming oligopoly instead . But if there is government monopoly...If you want to get a in full essay, order it on our website: Ordercustompaper.com

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