Spot price of West Texas Intermediate in relation to the price of Brent Crude. Historically price differences between Brent and other index crudes have been based on physical differences in crude oil specifications and short-term variations in supply and demand.
When does market failure occur? Whenever resources are not allocated efficiently. ie. total surplus is not maximised. What are the main types of market failure?
How government intervention to correct market failure? Generally, there are FOUR methods to deal with market failure. Taxation. some of the tax revenue is used to finance merit goods and public goods, such as education and health.