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infoWhy this? Externalities, information gaps, public goods, and factor immobility help explain why markets may fail to use resources efficiently across the economy. Exploring these alongside merit and demerit goods and environmental problems enables us to distinguish efficiency concerns from questions of fairness and evaluate possible government responses.

scheduleWhy now? Building on Year 12 market failure and this year’s analysis of market power, we broaden our attention to problems extending beyond the behaviour of dominant firms. This complements macroeconomic policy by examining structural and allocation problems, and supports later analysis of inequality and failures within the financial sector.