Efficiency of a competitive market, Microeconomics

The Efficiency of a Competitive Market

*? When an competitive markets generate an inefficient allocation of the resources or market failure?

  1) Externalities

  • Costs or benefits which do not show up as part of the market price (for example pollution)

 2) Lack of Information

  • Imperfect information prevents the consumers from making utility maximizing decisions.

*? Government intervention in these markets increase efficiency.

*? Government intervention without market failure creates inefficiency or the deadweight loss.

Posted Date: 10/12/2012 6:12:52 AM | Location : United States







Related Discussions:- Efficiency of a competitive market, Assignment Help, Ask Question on Efficiency of a competitive market, Get Answer, Expert's Help, Efficiency of a competitive market Discussions

Write discussion on Efficiency of a competitive market
Your posts are moderated
Related Questions
What are the advantages of leaving the allocation of a countrys resources to the price mechanism? Ans) The main conditions needed are: 1. Either a finite number of agents or pr


Question : (a) Suppose Firm A is a perfectly competitive firm producing good X and faces the following average revenue and average cost Average Revenue: P = 10 Average Co

define and explain the concept of social efficent production

LONG PERIOD ANALYSIS: Long period refers to a time when all the factors are variable. Earlier in the short period analysis, we had considered capital (K) to be fixed factor. H

Divisional Str ucture Some organizations run as a number of divide, autonomous business units, synchronized by a central headquarters. This is a divisional structure.

discuss scarcity,choice and opportunity cost

Please provide detailed answers, showing all your work, to all five sections in problem 15.9 in the Nicholson and Snyder book. This is an individual take home task due at 11:59pm o

Theory of Oligopoly: Oligopoly is that situation where the number of firms in the market is large but not as large as in the case of perfect competition so that it is possible for

1) Lynne's income is £2, 000 and she is risk averse. The probability of someone slipping on her stairs is 1/8. If this happens, she will be sued for £1, 000 and will have to pay th