MARKET FAILURE 1
Market Failure
Shayne Alldredge
ECON 202
Paul Wheeler
October 14, 2015
MARKET FAILURE 2
Market Failure
Market Failure is defined as ‘An economic term that encompasses a situa’on where, in
any given market, the quan’ty of a product demanded by consumers does not equate to the
quan’ty supplied by suppliers. This is a direct result of a lack of certain economically ideal
factors, which prevents equilibrium.’ There are a couple of di/erent things that factor into
market failure including, externali’es, public goods, and inequality. We will discuss these three
topics and what their roles are in market failure. For now, let us talk about externali’es.
Externali’es occur when one person’s ac’ons a/ect another person’s well-being and the
relevant costs and benefit are not re3ected in market prices.[CITATION Bry08 \l 1033 ] Posi’ve
