Question

What are three real-world examples of market failure that have occurred in the last month (July 2020)?

Answer 1

Market failure is an economic situation defined by an inefficient distribution of goods and services in the free market . Examples of market failure--Markets failed to produce enough merit goods like education and healthcare.Eg UK 's nationalised healthcare has high level of demand because of the present situation.So patients have long waiting times. This is a market failure as market is not properly supplied.Again markets failed to control the manufacture and sale of demerit goods like cigarettes and alcoho as consumption of such goods increased in this period.Thirdly,there was rise in prices due to undersupply of goods . As a result customers paid higher prices , leading to inefficient allocation of resources.