Answer to Question #215076 in Macroeconomics for Jon

Question

Explain what market failure is and the various sources they emanate from

Answer 1

Market failure entails an economic situation where by an inefficient distribution of goods and services in the free market

Some of the sources of market failure include positive and negative externalities, environmental concerns, lack of public goods, underprovision of merit goods, overprovision of demerit goods, and abuse of monopoly power.