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The Key Ideas Of Market Failure

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SHOGBIYANJU ADETOLA
SHOAAC1302
Contents
i. Executive summary ii. Introduction iii. Why should the public sector intervene? iv. Intervention for equity considerations
v. Risks of intervention vi. When should the public sector intervene?
Vii. Conclusion viii. References

EXECUTIVE SUMMARY
The key ideas of market failure is the non-appearance of specific goods and services, competitive markets delivery the efficient quantity of all goods and services – that is the amount which best meets people’s requirements and favourites, given scarce resources. Market failure refers definitely to the causes of the failure, which is problems with the techniques through which the market works, not the results of the failure to deliver a certain outcome. The public sector should only interfere in the economy when markets are not well-organized and when the involvement would improve productivity.
There are reason for this market failure intervention: - the first reason is public sector intervention is confirmation that a market failure exists. The second reason is that the intervention will make an improvement which depend on how important the failure is and on the public sector’s ability to plan and carry out an effective intervention.
INTRODUCTION
A market is a setting up in which individuals or firms exchange not just GOODS, but the rights to use them in particular ways for particular amounts of time. (John O.Ledyard, 2008)
As a result, agents ' control over
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