Market Failure Private Social Cost

At the end of the lesson, students should be able to:

Define market failure and the key terms associated with market failure: public
good , merit good, demerit good, social benefits , external benefits, private benefits,
social costs, external costs, private costs.
Causes
of market failure With respect to public goods, merit and demerit
goods, external costs and external benefits, abuse
of monopoly power and factor
immobility . Examples of market failure with respect to these areas only.
Consequences
of market failure The implications of misallocation of resources in
respect of the over consumption of demerit goods and goods with external costs,
and the under consumption of merit goods and goods with external benefits
Note:
diagrams of demand and supply relating to market failure are not required.
‘Class Activities’ and ‘Multiple Choice Questions’
with Answers.’