Market failure occurs when the market does not clear due to lack of an equilibrium point. In most cases, it is when the supply does not meet the demand. It also occurs when there is an alternative situation for the same market to be in and more people to gain from it rather than that situation. The resources can be utilised for greater consumer utility.
What are the major reasons that a free unregulated market in medical care might not be optimal?
- The existence of monopolies in the market. Monopolies are known not to cater for the welfare of the consumer and to charge high price. In this case consumers, who are the sick people, ...