Market failure is a term used by economists to describe the condition where the allocation of goods and services by a
market is not
efficient. The first known use of the term by economists was in 1958, but the concept has been traced back to the Victorian philosopher
Henry Sidgwick. The belief that markets can fail is a common
mainstream justification for government intervention in
free markets. Economists, especially
microeconomists, use many different models and theorems to analyze the causes of market failure, and possible means to correct such a failure when it occurs. Such analysis plays an important role in many types of
public policy decisions and studies. However, not all economists believe that market failures occur, or that they are compelling arguments for government intervention, due to
government failure.
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the inability of private markets to produce certain goods and services.
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