Answer to Question #269396 in Macroeconomics for sdn

Question

What kinds of market failures are present in the economic self-discovery framework, and how may they be overcome?

Answer 1

In economics, market failure is a scenario characterized by inefficient allocation of commodities and services in a free market. Public goods, market control, externalities, and imperfect knowledge are the four different types of market failures.

Government intervention, such as new laws or taxes, tariffs, subsidies, or trade restrictions, can be used to fix market failures. Governments can also intervene in markets to improve economic justice in general.