Why is it important for the government to have a resourceful?
It is the desire of any government to have a resourcefulbecause market is one of the major pillars of the economy. When market fails, the whole economy of the country fails and that is why the government intervenes in case a market fails. There are many causes of market failure and that is where the government put a lot …
What is the role of government in correcting market failure?
market failure is very common in many markets in the world, it occurs when a well -established market fails to allocate resources properly. There are many types of market failures that exist but failure of the market on resources will be the main focus of the paper.
How can the government correct this failure?
It can correct this failure by privatizing most of its corporations. This is where the government gives individuals the right to manage the corporations fully. It can also give the private companies the right to carry some of its public operations like building roads.
When does market failure occur?
Market failure is said to occur when goods or services are not allocated in an efficient manner , or when the quantity of a good or service in demand is unequal to the quantity supplied (“Market Failure,” 2007).
Does rent control hurt the poor?
In theory rent control sounds like a perfect way to help the poor by setting the price ceilings on the rent, but in reality it only will hurt them. In the real world rent controls do not work like most people would expect them to, maybe its because not many people had their lesson in economics.
Why does monopoly power prevent production?
This monopoly power prevents production because other companies or producers have no chance of venturing into the market in any way. This monopoly makes even the government to compromise with it because it gives the government threats of moving out of the market which means that the whole market would collapse.
What happens when the market fails?
When market fails, the whole economy of the country fails and that is why the government intervenes in case a market fails. There are many causes of market failure and that is where the government put a lot of pressure in order to rectify. The government has a major role to play in the market and its efforts cannot be ignored.
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