Outline and briefly explain one form of market failure

One form of market failure is the abuse of monopoly power. Through monopoly, pricing will create a deadweight loss due to a company forgoing transactions with its customers. With that said, a monopoly can become less innovative because it becomes less effective over time due to the lack of competition in the market place. The price mechanism in a monopoly fails to take into account all the benefits and costs of providing and consuming products. It results in a lack of equilibrium between supply and demand. Lastly, limiting production and access to technical development in a monopoly causes artificial barriers to fair access.