What is Partial Market Failure?

• What is Partial Market Failure?:

  • Partial market failure occurs when a market exists but there is a misallocation of resources
  • Goods and services will be supplied but at the wrong amounts e.g merit and demerit goods
• What is the difference between complete market failure and partial market failure?

  the market exists however there is a misallocation of resources
• Why is there a misallocation of resources for partial market failure?

  goods and services are supplied but at the wrong amounts
• What is an example of partial market failure?

  negative externalities such as pollution
• What diagram is it for partial market failure?

  negative externalities of production
• How may a partial market failure be addressed?

  through government intervention such as taxation