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infoWhy this? Market Failure Across the Economy is taught because it develops an understanding of situations where markets do not produce the most socially desirable outcomes. Students explore externalities, merit and demerit goods, factor immobility, information failure, and environmental issues, helping them analyse why market outcomes can lead to inefficiency and inequality. Market Failure Across the Economy also enables students to evaluate the role of government intervention in addressing these problems and improving economic and social welfare.

scheduleWhy now? Market Failure Across the Economy is taught after Market Power and Market Failure because students have already explored how individual firms and markets can generate inefficient outcomes. This unit broadens that understanding by examining market failure across the wider economy, including environmental issues, information gaps, and the provision of public, merit, and demerit goods. Market Failure Across the Economy develops students’ ability to evaluate the social and economic consequences of market failure and prepares them for the study of government intervention and macroeconomic policy in the final part of the course.