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?
Identifying one or more significant sources of market failure provides evidence of a potential case for. regulation. However, regulation frequently fails to address the identified market failure effectively and. efficiently. There is a risk that market failure may be supplanted (or compounded) by regulatory failure.