Question

When a market fails to produce an efficient outcome? Can you state a personal case of market failure you have experienced?

Answer 1

When the market is generating an externality then they can be considered as failed to produce an efficient outcome. Or in micro economics we can say that the market has failed when the demand and the supply in the market are not equal,

Example of first market failure is pollution caused by the vehicles on the read, here the economic transaction between the two will cause a negative externality for the third individuals and the social cost will be larger than then private cost.

Second, Sugar market in the US where the price are kept high and that create a supply and demand mismatch causing excess surplus of the sugar in the market.