Share This Article:

Economic Definition of market failures. Defined.

Offline Version: PDF

Term market failures Definition: Conditions in which a market does not efficiently allocate resources to achieve the greatest possible consumer satisfaction. The four main market failures are--(1) public good, (2) market control, (3) externality, and (4) imperfect information. In each case, a market acting without any government imposed direction, does not direct an efficient amount of our resources into the production, distribution, or consumption of the good.

 

« market failure | market period »

Permalink: http://glossary.econguru.com/economic-term/market+failures

Alphabetical Reference to Over 2,000 Economic Terms