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Microeconomic Theory Dilfraz Singh, Lovely Professional University
Notes
Unit-23: Market Failure: Meaning and Sources
CONTENTS
Objectives
Introduction
23.1 Types of Goods and Services
23.2 Excludable Goods and Market Failure
23.3 Excludable but Non-rivalrous Goods as a Source of Market Failure
23.4 Non-excludable Goods and Market Failure
23.5 Externalities and Market Failure
23.6 Negative Externality
23.7 Positive Externality
23.8 Externalities and the Coase Theory
23.9 High Transaction Costs
23.10 Summary
23.11 Keywords
23.12 Review Questions
23.13 Further Readings
Objectives
After studying this unit, students will be able to:
• Know the Types of Goods and Services.
• Know the Externalities and Market Failure.
• Understand the Externalities and the Coase Theory.
• Explain the High Transaction Costs.
Introduction
The market failure means the condition of market which is based upon the power of demand and
supply does not capable to distribute the factors. The one of the main sources for market failure is
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