Market failure

From Wikinfo

In economics, market failure is a case where markets fail to efficiently provide or allocate goods and services. The two main reasons that markets fail are sub-optimal market structures and the inability to internalize costs or benefits into the economic system.

Examples of the inability to internalize economic information are:

• externality
• public goods
• undefined property rights

Examples of sub-optimal market structure are:

• imperfect competition
  • monopoly
  • monopsony
  • oligopoly
  • oligopsony
  • monopolistic competition
• asymmetrical information
• downward sloping longrun average cost curve, ie. natural monopoly
• price discrimination
  • price skimming

Additional work on this article is appreciated.

See also:

• microeconomics
• externality
• social cost

References

• Adapted from the Wikipedia article, "Market_failure" http://en.wikipedia.org/wiki/Market_failure, used under the GNU Free Documentation License