2.10 Market Failure Flashcards by Aryan Bisht

Q

When does market failure happen?

A

When the price mechanism fails to allocate resources effectively

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Q

List 3 causes of market failure

A

Social Costs exceed Social benefits
Lack of public goods
Abuse of monopoly power

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Q

Define a monopoly

A

A single supplier who supplies the entire market with a particular product, without any competition

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