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?
Now as the inflation occurs when there is imbalance in too many chasing too few goods. In certain case when demand is not matched with supply there is general rise in price. Now what does for example RBI (a central bank in india) fiddle with to reduce inflation. A very efficient tool as of now is to lower the money people have in their hands who are chasing too few goods available in the market.