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3.8 Limitations of markets
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Why markets can be limited

Why markets can be limited

Comparison diagram showing buyer and seller exchanges with a third party affected by external costs in a negative externality and external benefits in a positive externality, leading to too much or too little activity

A market works well when prices guide resources to where they are valued most. But markets can be limited when buyers and sellers ignore spillover effects on other people. This is one form of market failure.

3.8 Limitations of markets Lesson

  1. GCSE
  2. /Economics
  3. /3.8 Limitations of markets

Step-by-step lessons on OCR GCSE Economics 3.8 Limitations of markets, covering 3.8.1 Positive and negative externalities, 3.8.2 Policies to correct externalities, 3.8.3 Impact of externality policies, and 3.8.4 Costs and benefits of externality policies. Each one builds up to exam-style questions. Build a solid grasp of supply and demand and cost/revenue calculations before tackling the evaluation-heavy policy topics.

Lessons