Question

Good day, I need a 250 word essay- Investigate an industry market failure that has occurred within the last 10-years (2009-2019) in the U.S. Identify the events that led to market failure. - Discuss steps that should have been taken to self-correct the market failure and steps that are being taken to eliminate the need of another government bailout in the future. Is your chosen industry currently operating efficiently? 2009-2019

Answer 1

Market Failure

Explanation:Market Failure refers to a economic situation in which there is inefficient distribution of goods and services.In simple words it can be said that it is a state of disequilibrium where quantity supplied is not equal to quantity demanded.In case of market failure the decision taken for the group as a whole turns out to be wrong.

Causes of Market Failure:

• Hiding some important information from sellers which can affect their decision making.
• War between firms acting as "Price Makers" and "Price Takers". Price Takers will have to accept the price set by Price Makers.
• Equal benefit of goods or services enjoyed by both taxpayer and non taxpayer. E.g National Defense.
• There is not proper balance between costs and benefits for providers in the market.

Example: Market Failure in American K 12 Education

America has a system of public schooling which and its education system has certain market failures.

Private schools provide much better schooling as compared to public schools A private school student is more likely to get good job and earn higher salary and thus will be able to return more to the economy as compared to student of public school.Lack of Competition and lack of proper information about available public schools adversely affects the education system of America.Parents have to send their children to ZIP code assigned public schools.Only Higher income people can afford good education of private schools. People with low income have no option left other than public schools which lack in terms of quality education and facilities.

Steps to be taken by Government:

• Providing some educational funds to parents so that they can arrange tutoring for their children. They can also get access to online courses and fulfill other needs of the children related to education with the help of these funds.
• Sharing more information publicly about the schools with the parents. Parents can decide which school is better for the future of their children than blindly sending the students to the schools assigned on geographical basis.

Currently Some problems have been resolved relating to K 12 education but still lot many concrete steps have to be taken by government to improve the situation further.

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