Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Market failure: A case study - Essay Example

Comments (0) Cite this document
In the paper “Market failure: A case study” the author analyzes the situations where the forces of the free market are incapable of making efficient allocation of resources. This leads to the situation of inefficient market condition. Various reasons might lead to the violation of market stability…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95% of users find it useful
Market failure: A case study
Read TextPreview

Extract of sample "Market failure: A case study"

Download file to see previous pages There are various studies that look into the ways in which the market failure is corrected. The case of intervention by the government is considered by economist and policy makers for the development of policies to deal with a situation of market failure (Salanié, 2000). However, for understanding the ways to correct market failure, insights into the sources of market failure is required. Some economists generally define the condition of market failure in terms of the public goods or the theory externalities. The way the market is defined explains the source of the market failure. If the market is defined in terms of quality of the environment, then in case of market failure the source of it is traced back to issues in accessibility of public good. Alternatively, if the market is defined in terms of the system of production and consumption that causes some damage to the environment, the source of failure is identified as an externality (Callan and Thomas, 2010). Essentially, market failure is the situation in which there is over supply in the market (misallocation of resources). Since supply is abundant, price received for the good or service is less than the true cost of producing the good (in terms of resources consumed for producing the good) (Dollery and Wallis, 2001). The Competition Commission of the United Kingdom is “an independent public body” (Competition-Commission, n.d.) which looks after the condition of the market in the country. The Commission ensures that there is a healthy competition.  among the companies operating in the UK market so that the consumers and the entire economy as a whole ultimately benefits. The body is responsible for conducting investigations on different market activities and for making various other enquiries related to the policies of regulations in different industries in the country. It makes all efforts to preserve the “competition law in the United Kingdom” (Competition-Commission, n.d.). It is a competition regulatory body in the Department for Business, Innovation and Skills (BIS) in the UK. It ensures the establishment of healthy competition among private companies in the UK for ultimately benefitting the consumers as well as the entire economy.
The Competition Commission was developed in the 1999 and replaced the Monopolies and Mergers Commission. The activities of the Commission are guided by the policies of the Competition Act 1998 and currently, most of the powers are exercised by the Enterprise Act of 2002. This act has provided the Commission with significant power and it enjoys greater levels of independence than that the Monopolies and Mergers Commission had enjoyed previously.
Attempts to correct market failure
The power of the Commission is not restricted to offering recommendations to the government. Higher power and greater independence of decision allows the Commission ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Market failure: A case study Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
Market failure: A case study Essay Example | Topics and Well Written Essays - 1500 words. Retrieved from
(Market Failure: A Case Study Essay Example | Topics and Well Written Essays - 1500 Words)
Market Failure: A Case Study Essay Example | Topics and Well Written Essays - 1500 Words.
“Market Failure: A Case Study Essay Example | Topics and Well Written Essays - 1500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Market failure: A case study

Case study: Pressure Vessel Failure

...?Non-Destructive Evaluation and Testing (NDE&T) Pressure Vessel Failure Case Study Introduction Pressure vessels are vessels or containers meant to contain high pressure fluids like water, chemicals, steam etc. These are indispensible for modern industrial activities. Pressure vessels find extensive usage in wide spectrum of industrial activities; some of these are listed below. a) Pressure Cooker in our kitchen for quick cooking of food b) Autoclaves in mineral beneficiation industry for high temperature leaching of minerals to increase leaching rate c) In chemical industry to carry out different reactions like ammonia synthesis etc at faster rate and for higher yield d) In thermal power industry to produce high pressure steam to run...
6 Pages(1500 words)Essay

Case Study: Operation Market Garden

...?ii (your information) Table of Contents Introduction 2 History 4 Planning and Preparation 5 Deployment 6 Execution Action 7 After Action 8 Lessons Learned 8 Case Study: Operation Market Garden Case Study: Operation Market Garden Introduction The military operation that was titled Operation Market Garden was unsuccessfully attempted by allied military operations during September of 1944. The World War II operation was the largest airborne operation up to that point in time, led by Field Marshal Montgomery in order to push forward into Germany by crossing the Rhine. This was done in order to bypass several other options of entry that were far less hospitable or timely. The purpose of air support was to secure bridges that would provide...
8 Pages(2000 words)Case Study

Market failure

...? A case of Market Failure: The Northern Cod Executive Summary The cod fisheries in Labrador and Newfoundland attracted local fishermen as well as international fishing fleets for more than four centuries (“Cod Moratorium”). Fishermen have voraciously fished for various marine species, like, seals, salmon, herring, and whales, in this zone besides the northern cod. Unregulated open fisheries in the Pacific Ocean created a common resource for the fishermen. Both local fishermen and foreign fishermen exploited these resources with the aim of maximizing private profits. This decreased the total reserve of fish in these areas and at one point of time the cod population became extinct (“Fish Stock Depletion”). Experts opine...
5 Pages(1250 words)Research Paper

Market Failure and Government Failure

The governance failure under these circumstances best describes the law studied for my policy. This is based on the fact that the government is destined to always respond in two ways to market failure and that can be through action or inaction. Both the two approaches can always succeed or fail. Market failure as identified with negative externalities b) Negative externalities occur when the action from one player in the market is harmful to the other. For instance, the factory owners in most instances concentrate on their production than the likely harm that the emissions from their plants are causing to the general public. The pollution secondary thus become secondary to them at the expense of the environment and health of the p...
4 Pages(1000 words)Assignment

Market Failure

...I. II. Thesis: The reasons for market failure due to failure in banking system and steps taken to overcome it. III. Market Failure A. Supervision B.Financial System C. Export Information Collection and Use in Decision-Making Khalifa Al-Qubaisi Dr.Martin H.Saboo Micro Economics 1-5-2009 Market Failure The stock markets are not for the chicken hearted. They can take an individual or an economy on a roller coaster ride from huge profits to deep losses. The year 2008 was marked by volatility in the world stock market due to subprime mortgage crisis. From January to October, 2008, the U.S markets had to face a huge downturn , with a loss of 770 points in a single day. This loss...
6 Pages(1500 words)Case Study

Respiratory failure Case Study

...Case Study-Based Assignment Question On general physical examination, Wilson had increased respiratory rate (28 breaths per minute), deep and laboured breathing and saturations of 89 percent on oxygen of 6L per minute. Respiratory system examination revealed intercostal muscle recession on inspection and diminished air entry to both bases and crepitations in the right base on auscultation. Arterial blood gas analysis revealed PaO2 less than 60mmHg (58mmHg) and PaCO2 more than 50 mmHg (54mmHg) with pH of 7.3. These are the four pieces of evidence pointing towards acute respiratory failure. Respiratory failure is a condition in which the function of the respiratory system has altered in such a way that the partial pressure of oxygen...
7 Pages(1750 words)Case Study

Market Failure Resarch Paper

... Market Failure Scarce resources in a free a market are allocated via the price mechanism where the needs or preferences and spending decisions of customers and supply decisions of producers come together to determine acceptable prices. High demand of goods or services leads to increase supply of the products to meet rising demands. High prices motivate producers to produce more while it kills the morale of consumers from purchasing the products. Pricing system sometimes does not consider income inequality in that price of certain goods and services are always high making it hard for low-income earners to access them. It is the duty of the government to intervene and make sure that prices set are not discriminative. Government...
1 Pages(250 words)Research Paper

Market Failure

... of the market that are non-competitive as well as in the case of public goods. One real life example of market failure is immobility of labor. The main types of market failure include the presence of gaps in skills, immobility of labor and inequality (Riley, 2011). Reasons of market failure There are two types of labor immobility- occupational, geographical and industrial. There are some imperfections in the market for labor which might lead to failure of market. For occupational labor mobility the main causes of market failure is skills do not match for the new jobs that are available. Often new jobs are available in the market but the available skills of the labor do not match the requirements. The second cause for the occupational labor...
2 Pages(500 words)Essay

Market Failure and Government Failure in Europe

For several decades, a debate has been raging in development economics on the relative virtues of the free market as opposed to state intervention. With the help of analytical models of a market economy, the interventionists have demonstrated what they have considered as serious instances of market failures. That is to mean, the inability of a market economy to reach certain desirable outcomes in resource use. The protagonists of the free market on the other hand, compile impressive lists of ill-covered and counterproductive policy measures implemented by the governments of different nations at different times. As a result, there has been serious wastage of resources in the economies of these countries.
This debate has in...
7 Pages(1750 words)Essay

Starbucks in Chinese Market

In the year 1996, the coffee giant marked its global presence. Up until 2004, the Chinese government prohibited Starbucks to operate its own stores in China. As a result, the coffee giant enters the Chinese market by joint-venturing with Chinese food and beverage companies and licensing other companies to own and operate its stores--differs from its domestic approach. But the company was able to easily overcome its initial obstacles and marked its presence in China very quickly and successfully with great brand recognition and customer satisfaction. The company also tailors its stores to match the local atmosphere. This is a transnational strategy. “For example, the Starbucks strategy in Shanghai is to attract middle to high...
7 Pages(1750 words)Case Study

The Challenges of Foreign Market

Any multinational company is exposed to risks such as change of foreign currency exchange rate, commodity prices, and interest rates because it denominates its transactions in foreign currencies. That’s why there is also some uncertainty in future earnings, liabilities and assets values.
Therefore, before taking a decision on the country of entry, a profound analysis of its current political and economical situation is to be performed. According to Kotler and Armstrong (351-361), a decision on whether to enter a foreign market should be based on a profound analysis of potential risks and opportunities, as well as the company’s internal resources.
The company is a Limited Liability that exports roasted and gro...
11 Pages(2750 words)Case Study

A Comparative Study of the Origins of Ethical Thoughts

Do you know what they dug out? -- Wires! It proves that two thousand five hundred years ago, in the age of Pericles, the Greeks had telephones”. The Jew laughingly retorted: “Recently they were digging in Jerusalem. They dug out nothing. This proves that three thousand years ago when Solomon was the king of Judea, the Jews had the principle of wireless!”

ETHICS AND DIVERSE DEFENITIONS: One of the Dilemmas of the civilized human society was the fight between the soul and the flesh or rather the body and desires. The question is how to divert human energy in an intelligent, controlled way? Searching answers to this question one lands in the premise of ethics, personal as well as social. Ethics (English)...
11 Pages(2750 words)Case Study

Oil Prices by OPEC and Market Fundamentals

Market failure is defined as the inefficient allocation of resources by the market, the free market is considered to optimally prices and resources in the production of goods and services, and this is because the price and quantity produced are determined by market forces which include the demand and the supply. The control of prices by a firm or an organization in the market results in market failure, therefore OPEC leads to market failure due to its nature in the market.

OPEC was formed in 1960 by 5 oil-producing countries which include Venezuela, Saudi Arabia, Kuwait, Iran and Iraq, The aim of this organization was to unify petroleum-producing countries in order to realize fair and stable prices of oil .other oil-pro...
6 Pages(1500 words)Report

The Idea of Liberty in Sam Slime Case

... Sam Slime This could certainly be the case of the rich get richer and the poor go to jail, especially in a country that is trying to serve many masters. The government of the United States is certainly a political and governmental entity, but at it heart it has almost always been a voice of corporate business and expansion of wealth for the few. It operates seemingly under the principle guise of what is good for business is good for the people. One could say that the state of the economy today is the fallout of this mindset. In the “Sam Slime” case study we see the idea of liberty as applied by several masters. The first, when Sam Slime mugs you outright is a matter for governmental law and order. Cleary there is a criminal (Sam...
8 Pages(2000 words)Coursework

The Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market

It is a difficult task to find those vendors who not only have the adequate quality and quantity of the needed raw materials but who also have an attitude of efficiency and display commitment to customer service (Sonmat, 2006). Further, organizations also strive to locate and select vendors who can be depended upon for long term relationship.

The number of factors or attributes desired from the vendor is vast, and different organizations and different industries place different importance on the attributes (Sonmat, 2006). Some of the vendor attributes may gain importance owing to the nature of the industry, for example, in the case of consumer perishables suppliers, like fresh vegetables or fruits, the buying firm would...
20 Pages(5000 words)Literature review

Analysis of OReilly v Mackman Case

Judicial review is a concept which is constitutionally undecided as it on one side, it shores up the rule of law, democracy, and pre-eminence of parliament by facilitating the courts to check the boundaries of government authority and on another side, the courts are open to the decision on the plants based on the fact of separation of authorities that are intimating with the verdicts of democratically elected institutions. Judicial review is not apprehended with the virtues of government assessment but deals with whether the deciding authority has remained within the legal boundaries and whether broad principles of rationality and fairness adhere. The constitutional basis of judicial review is debated as one view holds that it is...
8 Pages(2000 words)Case Study

Analysis of Tourism and Hospitality Law Case

 The main issue that needs to be tackled first is whether there is a valid contract between Richard Brat, carrying on trade as Brighton Greens, (buyer) and Molly and Kelly trading in First Grade Granny Smith apples as Holy Farm.

Apparently, there was, when considering their verbal and written mail sent by Richard to Holy Farm on August 1 reading as follows –“Please deliver 20 boxes –Granny Smith ‘Brighton Greens’. Cheque mailed.“

It may be seen that the mail order does not specify the category or grade of apples to be supplied, but one of the implied conditions of sale could be that the goods ordered need to correspond with the goods inspected and tested.

In th...
8 Pages(2000 words)Case Study

The Market Failure

A healthy market is one which acquires a balance between supply and demand. When an imbalance occurs between supply and demand, the market may consider as going through the failure phase.
The market is not an absolute entity. It undergoes relative changes every time because of its association with so many internal and external parameters. In other words, the market fluctuates all the time when any problems may arise to the associated entities of the market. The market often fails when the individual interests try to dominate over the general interests of the market. For example, China is accused of implementing unhealthy strategies in the market. China is concentrating on mass productions of goods. They were able to sell their...
8 Pages(2000 words)Term Paper

Foreign Market Entry and Diversification

...Foreign Market Entry and Diversification Table of Contents Identification and discussion of the trendsin the global beer markets 3 International expansion trends and Modelo’s internal expansion 5 The next foreign market Modelo should enter 6 Challenges from InBev 7 Modelo should diversify 8 References 10 Identification and discussion of the trends in the global beer markets Beer industry is one of the largest industries in the world. Over the last few years the entire alcohol industry enjoyed a satisfactory performance. In 14th century modern beer industry started in Europe. Since the tastes of consumers vary from region to region, the industry was clustered in nature and it was dominated by several local breweries. Earlier transportation...
7 Pages(1750 words)Assignment

Conflict Between Researh and Ethics on the Tuskegee Syphilis Study

The Declaration of Helsinki by the WHO clearly states that in clinical trials involving humans the wellbeing of the subject should be of prime importance than the interest of science or society. This has been stated because at times in order to achieve the objectives of a study the investigators might overlook the welfare of the trial subjects thus jeopardizing their health in the process. According to ethical rules while comparing two treatment options the control group of the study must receive the best-known treatment available while the study subjects are given a potential newer treatment. Only when there is no effective treatment available a placebo-controlled group can be used for the study. There have been several trials th...
7 Pages(1750 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Market failure: A case study for FREE!

Contact Us