Pros And Cons Of Market Failure

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Market failure means resources are not allocated correctly, if market failure happens government needs to take a hand in the market. Or it could cause a crisis in a country's economy (Cowen & Crampton, 2002). Economic crisis will cause disaster for people's lives, it is the responsibility of the government to prevent this crisis. Merit goods are provided by the government, because it is totally free and it is benefit for the entire society, enterprises will not provide these services and goods (Robbins, 2007). For example, education's importance is not aware by many people. They usually think school and education are not essential to do. Actually, in order to have a brighter future, their kids need the high-quality education to access the knowledge. And these kinds of things are the merit goods which are provided by government, because no one else will provide these free services and goods for people. If government doesn't willing to do that, many people won't choose to pay for these things, and it is not good for whole society. Public good is not only for any individual, this kind of good and service are…show more content…
It don't have all the features of the competitive market, sometimes it is even opposed to competitive market (Chang & Katayama, 1995). In imperfect competition, there is monopoly in this kind of market. And the characteristics of monopoly have four parts. The first one is there is only one big company in the market. The second one is it will give the products and services prices, others cannot decide them. The third one is this company will stop others getting into this industry. The last one is government controls this kind of companies. If government doesn't get involved into this problem, the whole market will lose control, these big companies will control the price, maybe people cannot even afford these goods anymore. So government needs to control
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