efficiencies and inefficiencies. perfect competition and example from your
personal life. four sources of market
failure and examine how each led to an inefficient allocation of resources. example for each four sources of market failure.
Negative externalities (e.g. the effects of environmental pollution) causing the social cost of production to exceed the private cost
Positive externalities (e.g. the provision of education and health care) causing the social benefit of consumption to exceed the private benefit
Imperfect information or information failure means that merit goods are under-produced while demerit goods are over-produced or over-consumed
The private sector in a free-markets cannot profitably supply to consumers pure public goods and quasi-public goods that are needed to meet people’s needs and wants
Market dominance by monopolies can lead to
under-production and higher prices than would exist under conditions of
competition, causing consumer welfare to be damaged
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