Examples Of Market Failure

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Q1 Market failure: In my view: market failure is a market can’t be in accordance with the original efficiency of the distribution of goods and services. For example: The status quo of the market has no way to meet the interests of the people of a situation Merit Goods (Doe. M. 1965) is one: people produce an unreasonable consumption of consumer goods evaluation. For example, cigarettes harmful to people's health, but some people want to buy. Education is important to people, but some people do not put money into it. Government intervention can lead to a decline in merit goods production, some people would rather buy a better car, a better house at some point, and do not want their children to receive better education. However, such as tobacco …show more content…

Therefore, in my view, the Government needs to strictly regulate the merit goods and harmful goods. As far as possible to promote fairness. Public goods (Maidenhead: McGraw-Hill, 1999) are the symmetry of private products, refers to the consumption or use of non-competitive and benefit on the non-exclusive products, refers to the vast majority of people to consume or enjoy the products or services. (Maidenhead: McGraw-Hill, 1999). For example: Taxes are used to create better welfare for the people, and his costs are obtained from every people, but he does not change for the personal reasons of a person. Public goods need to develop different prices, different public goods to develop the price is also different. They do not serve the same purpose, so we do it in a different way than when we manage them. So we need the government to provide public …show more content…

S 1895) The first is that there is only one business in the industry in control. The second is that the enterprise can control the market price of the product. The third is difficult for other companies to intervene in the monopoly of the product range. The fourth is that it is often subject to government, or legal provisions. 1.The price we buy is not the same as the cost price of the merchandise, because in most cases the price is determined by the seller, but when the supply is greater than the demand, the price is determined by the buyer. 2.That some buyers and sellers will hide some details, for example, intentionally raise the selling price or require a discount on the items, so this happens we need the government to intervene. 3.This may also be difficult to enter the market, for example, there are many laws and regulations and government intervention Externalities refer to: The external influence of one economic agent on another, but this external influence cannot be measured and cannot be measured by the price in the market Example of negative externalities: 1.light fireworks: You buy fireworks, to meet their own needs at the same time the air quality damage, damage to the interests of

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