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The following situation may lead the market mechanism in not leading to the most efficient output and market will fail. These situations can be classified under the following head:
The examples of externalities are, suppose that a person is suffering from a contagious disease. He considers that by going to a doctor, his costs will be the fees paid to doctor and benefits will be the cure of the disease. However, he will not take into account the fact that if he does not go to the doctor, other people might catch the same disease. This will result in less-urgency for him to go to the doctor. This shows how ignorance of negative externalities can lead to over production or irrational response. Now, let’s look at the example of negative externality in the context of a business or economic decision. Suppose you want to buy a car. The main consideration for the purchase will be the cost of the car and possible benefits attained from the car. However, market mechanism will ignore the impact of car purchase on the environment and other parties such as pollution, road congestion and accidents. This ignorance may tempt you into purchasing the good and hence there will be an over-production of good due to negative
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According to Fama‘s interpretation of an efficient market is a situation were no individual investor has an advantage over others in predicting excess returns on securities above the existing market price (Jayasuriya, 2008). This claim is based on the premise that at any given time no one will have information over and above what is available to other players.
According to the report a stock market can be said efficient if the market reflects all the information available to all the investors. If the market is efficient then all the investors would get profit from the stock market. But this doesn’t happen actually. The stock market is inefficient in the reality.
In relation to the radio frequency field, risks of RF burns have been known to arise. Most RF burns are however mostly caused by local and persistent heating of the skin, including the underlying tissue. This paper shall now discuss the different causes of RF burns, specifically RF burns during Magnetic Resonance Imaging (MRI) procedures, including its prevention measures.
The UK grocery market was worth 119.8bn in 2004, a growth of 4.2 per cent over the previous year according to IGD Research. The research firm forecasts that the market value will rise to 133.5bn by the end of 2009, with much of the growth attributable to inflation.
This kind of inefficiency mostly occurs when stock prices do not shadow the available information about them. The glitch is termed as market inefficiency which can occur even if the individuals are unable to apply certain
Market failures are defined by Investor Words as “A condition in which current prices do not reflect all the publicly available information about a security, such as when some individuals get certain information
It then allocates the resources available in the society to many potential uses. It also seeks to understand how national economic policies affect these households and firms.
According to Tietenberg (2006), microeconomic issues regarding the environment come in
I can price the product at a level, which only grownups can afford and also during advertisements maintain the notion that the product is not for sale to people below the age of 18.
Wine is supposedly considered and
Most factors causing stress to an individual are because of the individual’s interaction with his/her immediate environment. It is therefore an inevitable aspect of life that one should learn to live with, avoid, or subsequently manage. It is
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