List and give an example of each of the four types of market failure

Marketing Dec 27, 2020

List and give an example of each of the four types of market failure.

What are the reasons for why we need government intervention?

Expert Solution

Type of Market Failure	Example	Government Action/Solution
Externalities--some of the internal costs are not borne by the business	Pollution of air and water	Regulations (Environmental Protection Act)
Abuse of Market Power	Monopolies/Oligopolies such as the oil industry	Anti-trust laws
Public Goods--things that the market will not provide because there is no profit	National Parks	Government provides
Inequality--systemic differences in income or opportunity	Education	Free Public Education

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