Economists often discuss market failures, which occur when market outcomes do not correspond to perfect competition. There are also government failures of a similar type, when government agencies do not create the result which would occur under perfectly competitive markets. Most people focus on market failures without even addressing government failures, despite, in my opinion, government failures being more severe and pervasive.
Preference Bundling
When markets are used to allocate resources, each person can match their purchases to their own preferences. For example, if I go to the grocery store, I can buy apples and someone else can buy oranges without either of us harming the other. Each of us gets the particular good we want and prices adjust to reflect how much resources society uses for each of the goods. If oranges are out of season and require expensive greenhouses to grow, the price of oranges will rise…
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