MiEco 2230

Dilla University

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Market Failure – Complete Notes on Externalities, Public Goods, and Government Intervention
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32

mei 2026

2025/2026
This document provides a comprehensive overview of market failure, explaining when and why the market mechanism fails to allocate resources efficiently. It covers key concepts such as social, allocative, technical, and productive efficiency. The notes detail major sources of market failure including externalities (positive and negative), public goods, common resources, asymmetric information, and market power (monopolies/oligopolies). It also explores the tragedy of the commons, the free-rider p...
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