Market failure occurs when freely-functioning markets, operating without government intervention, fail to deliveran efficient or optimal allocation of resources.
Government Interventation To Correct Market Failure
- Command and control techniques(including regulation)
- Govt. subsidy and other form of financial assistance.
- Taxation (including indirect taxes designed to control pollution)
- Policies to increase compitation and reduce the immobility of factors of production.
- Provision and finance of public and merit goods.
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