Maths97Student
Badges: 1
Rep:
?
#1
Report Thread starter 5 years ago
#1
Hi, just wondering if market failure basically just means 'when consumer satisfaction is not maximised'?

If market failure is when resources are not used in the most efficient way, ie allocative efficiency is not achieved, and allocative efficiency is when consumer satisfaction is maximised, surely market failure is simply when consumer satisfaction is not maximised?
0
reply
Mike_123
Badges: 18
Rep:
?
#2
Report 5 years ago
#2
(Original post by Maths97Student)
Hi, just wondering if market failure basically just means 'when consumer satisfaction is not maximised'?

If market failure is when resources are not used in the most efficient way, ie allocative efficiency is not achieved, and allocative efficiency is when consumer satisfaction is maximised, surely market failure is simply when consumer satisfaction is not maximised?
Yeah it refers to the efficient allocation of resources and not achieving a Pareto optimum. It doesn't have to be consumers. It could be a fishing firm that is affected by the negative externalities that pollution creates.
0
reply
X

Quick Reply

Attached files
Write a reply...
Reply
new posts
Back
to top
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

Are you travelling in the Uni student travel window (3-9 Dec) to go home for Christmas?

Yes (126)
28.38%
No - I have already returned home (58)
13.06%
No - I plan on travelling outside these dates (87)
19.59%
No - I'm staying at my term time address over Christmas (41)
9.23%
No - I live at home during term anyway (132)
29.73%

Watched Threads

View All
Latest
My Feed