Question

What is market failure?

Answer 1

The market failure is asituation where the markets fails to allocate the scarce goods and services efficiently in the economy. In other words, the market failure is an economic concept , where in any given market the quantity demanded of a product by the consumers does not meeet the quantity supplied by the producers. There are many reasons for market failure such as negatuve externality, positive externality, public goods, existence of monopoly, information failure, principal agent problem etc...