Market Failure and Remedial Measures

Market failure occurs when the free market fails to efficiently allocate resources, leading to inefficiencies, inequality, or negative externalities like pollution. This can result from various factors, such as monopolies, public goods, or information asymmetry. When markets falter, society as a whole suffers from unmet needs or wasted resources.

To address market failure, governments and policymakers step in with remedial measures like taxation, subsidies, regulation, and public provision of goods and services. These interventions aim to correct inefficiencies, ensure equitable access, and minimize negative externalities. By striking the right balance between regulation and market forces, these measures help restore economic efficiency, fairness, and sustainability, fostering a healthier economy for all.