1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only)
x

Why markets may need intervention

Why markets may need intervention

Natural monopoly diagram with demand, MR, AC, MC and monopoly, average-cost, and marginal-cost pricing outcomes labelled

Market failure occurs when the free market misallocates resources and social welfare is not maximised. A natural monopoly exists when one firm can supply the whole market at lower average cost than several firms because fixed costs are very high and economies of scale are strong.

1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only) Lesson

  1. A Level
  2. /Economics
  3. /1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only)