Pros And Cons Of Market Failure

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Market failure means that resources can not fully play a role, may be caused by price monopoly, but also may be because the market utilization is low, this situation will cause revenue decline or failure of the market. For example, With the development of science and technology, more and more enterprises in order to improve the production efficiency by automatic machine instead of manual operation, the labor demand decreased gradually, more and more people are faced with the problem of unemployment, employment difficulties to become a common problem all over the world and not easy to control. This is the resource oversupply. People have a high demand for public goods, the demand far exceeds the amount of production, it reflects a country 's welfare level, but the problem with society development have contradiction(Steven G. Medema 2007.). Merit goods refer to the price of goods or services to bring the benefits of more than the value of themselves, the purchase of such goods or services should be subsidized even free, such as education or medical care, long-term considerations its value must be greater than itself. For example, education is a long-term investment, a short period of time can not clearly understand its benefits, a young educated children grow up has unlimited potential may have an important role in the society, no education children may not be able to reach more things and have to do some work in the bottom in the society, but these are not absolute, merit

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