a situation in which a market left on its own fails to allocate resources efficiently is known as oligopoly.
a situation in which a market left on its own fails to allocate resources efficiently is known as oligopoly.
a situation in which a market left on its own fails to allocate resources efficiently is known as?
oligopoly
central to environmental economics is the concept of market failure. market failure means that markets fail to allocate resources efficiently. as stated by hanley, shogren, and white (2007): "a market failure occurs when the market does not allocate scarce resources to generate the greatest social welfare. a wedge exists between what a private person does given market prices and what society might want him or her to do to protect the environment. such a wedge implies wastefulness or economic inefficiency; resources can be reallocated to make at least one person better off without making anyone else worse off." common forms of market failure include externalities, non-excludability and non-rivalry.
environmental economics
mises and hayek argued that this is the only possible solution and without the information provided by market prices socialism lacks a method to rationally allocate resources. mises argued in a famous 1920 article "economic calculation in the socialist commonwealth" that the pricing systems in socialist economies were necessarily deficient because if government owned or controlled the means of production, then no rational prices could be obtained for capital goods as they were merely internal transfers of goods in a socialist system and not "objects of exchange", unlike final goods, therefore they were unpriced and hence the system would be necessarily inefficient since the central planners would not know how to allocate the available resources efficiently. this led him to declare "that rational economic activity is impossible in a socialist commonwealth". mises developed his critique of socialism more completely in his 1922 book "socialism: an economic and sociological analysis".
perspectives on capitalism by school of thought