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Evaluate market failure in South Africa, Markets failure means that the best available or optimal production outcome was not achieved

Answer:


We can say markets fail to optimally allocate resources. Markets fail for different reasons. Any Suitable introduction.

Externalities:
Externalities are costs and benefits that convert private costs and benefits into social costs and benefits.

1. Private costs, internal cost are private costs and it is the normal price consumer pay.
2. Private benefits, also called internal benefits, it is advantage gained by the use of good or services, or the income derived from the sale of goods or services.
3. Social costs, it is the cost of goods and service to those who put them there, and for society as a whole, for example, a car contributes to pollution, etc.
4. Social benefits, the benefit obtained for the payment of a good or service, for example, consument is only gained during the summer months.

Mising Markets:
Markets are often incomplete in the sense that they cannot provide certain goods that are demanded. Due to their nature they will fail.

1. Community goods, good and services such as the army, police, correctional services, street lights, flood control, etc.
2. Collective goods, good and services such as parks, beaches, sidewalks, bridges, public transportation, etc.
3. Public Good, non-rival and non-excludable.
4. Merit and demerit goods, merit goods are goods that are beneficial to the general welfare of residents. Non-merit goods are considered detrimental to society.

Imperfect competition:
Competition is often hampered by power. The producers usually hae power, not the consumers. This means producers can influence the market to benefit them selves and not reflect centain market demands or trends.

Immobility of the factors of production:
Markets cannot adapt quicklt to changes in supply and demand. This is due to the immobility of the factors of production, namely: Labour, Capital, etc.

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