Question

Does market failure always require government intervention , market failure as a whole not specific types.

Does market failure always require government intervention , market failure as a whole not specific types.

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Answer #2

Answer - No , the market failure does not require the goverment intervention in every case. In many cases the failure arise due to the difference in the transaction costs , different firms may posses different costs. These costs are part of all markets . They can arise anywhere. Similarly there are other factors that cause the failure such as the irrational behaviour of consumer. But these factors due not require the government intervention. It is needed in defining the property rights etc. Hence all market failures do not require the government intervention.

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