0
Is it possible for a government's solution to a market failure to worsen the failure?
Wiki User
∙ 13y ago
Yes. If the government does not alleviate the cause of the failure, it will likely absorb economic resources and causes inefficiences/deadweight social loss which will only make things worse (aka - more costly). Examples: the Great Depression; Germany hyperinflation of the 1920s.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
When A situation in which the market does not distribute resources efficiently is considered to be?
a market failure
How can market failure occur in the market for hybrid automobiles?
market failure can occur when there is no money left to keep it running
What are the examples of microeconomics?
Market failure and Market structure.
Reasons for market failure?
Market failure happens because of inefficiency in the allocation of goods and services. Other reasons for market failure include incomplete markets, missing markets, and unstable markets.
State three possible causes of market failure?
Externality - Negative Externality And Positive Externality the positive externality is a cause of a market failure because producers do not take the benefits of externality into account to society, therefore they under-produce the good that generates it , a negative externality happens where MSC > MSB. Factor Immobility And Market Power .
When A situation in which the market does not distribute resources efficiently is considered to be?
a market failure
What are the relationships between market failure and externality?
externality is a type of market failure
How can market failure occur in the market for hybrid automobiles?
market failure can occur when there is no money left to keep it running
What cause market failure?
Market failure occurs when goods are not fairly distributed.
Why do you think it is not possible for government sectors to stand in competition with private producers in terms of market and marketing?
Mainly because it is not the governments job to do so.
What are the examples of microeconomics?
Market failure and Market structure.
What are the example of microeconomics?
Market failure and Market structure.
Reasons for market failure?
Market failure happens because of inefficiency in the allocation of goods and services. Other reasons for market failure include incomplete markets, missing markets, and unstable markets.
What are the 2 examples of microeconomics?
Market failure and Market structure.
State three possible causes of market failure?
Externality - Negative Externality And Positive Externality the positive externality is a cause of a market failure because producers do not take the benefits of externality into account to society, therefore they under-produce the good that generates it , a negative externality happens where MSC > MSB. Factor Immobility And Market Power .
How do property rights affect externalities and market failure?
Externalities and market failure will result from the difficulty of enforcing property rights.
What is the definition of market failure?
Market failure is when there is a misallocation of resources, such that merit goods are underprovisioned and demerit goods are overprovisioned. If a market does not fail, it means that the supply of the products, or the demand for these products, takes into account the social cost of production. The result of market failure on the supply and demand model is disequilibrium. The implementation of taxation and subsidies are two methods to correct market failure.
