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PERFECT COMPETITION, LONG-RUN ADJUSTMENT: A perfectly competitive industry undertakes a two-part adjustment to equilibrium in the long run. One is the adjustment of each perfectly competitive firm to the appropriate factory size that maximizes long-run profit. The other is the entry of firms into the industry or exit of firms out of the industry, to eliminate economic profit or economic loss. The end result of this long-run adjustment is a multi-faceted equilibrium condition that price is equal to marginal cost and average cost (both short run and long run).
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MARKET FAILURES: Conditions in which a market does not efficiently allocate resources to achieve the greatest possible consumer satisfaction. The four main market failures are--(1) public good, (2) market control, (3) externality, and (4) imperfect information. In each case, a market acting without any government imposed direction, does not direct an efficient amount of our resources into the production, distribution, or consumption of the good. See also | market | fifth rule of imperfection | sixth rule of ignorance | public good | market control | externalities | production | consumption | information | pollution | regulation |
Recommended Citation:MARKET FAILURES, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: May 14, 2024].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: market failures
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INCOME EFFECT The change in quantity demanded that results because a change in the demand price of a good affects real income (that is, the purchasing power of income) even though nominal income remains the same. This is one of two reasons, or effects, underlying the law of demand and the negative slope of the market demand curve. The other is the substitution effect.
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GREEN LOGIGUIN
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Today, you are likely to spend a great deal of time at an auction hoping to buy either a pair of handcrafted oven mitts or a coffee table shaped like the state of Florida. Be on the lookout for neighborhood pets, especially belligerent parrots.
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More money is spent on gardening than on any other hobby.
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"I don't know the key to success, but the key to failure is trying to please everybody. " -- Bill Cosby
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Toronto Stock Exchange
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