Market failure refers to the situation that the market cannot effectively allocate goods and services. For economists, this word is usually used when the inefficiency is particularly serious, or when non-market institutions are more efficient and their ability to create wealth is better than private choice. On the other hand, market failure is often used to describe the situation that market forces cannot meet the public interest. This paper focuses on the mainstream view of economics. Economists use modeling theory to explain or understand this situation. The two main reasons for market failure are:

Improper transmission of cost or profit price further affects the decision-making mechanism of individual economic market.

Second-best market structure.

In some economies, the existence of market failure usually leads to a debate about whether market forces should guide economic operation. This has also led to a debate about what to replace the market. The most common response to market failure is that some products and services are produced by government departments. However, government intervention may also cause non-market failure.

Types of market failure

Imperfectly competitive market

Monopoly (monopoly)

monopsony

oligopoly

cartel

oligopoly

Monopoly competition (monopoly competition)

Differential pricing (or price discrimination)

Price peeling (price peeling)