In the book: in the service of the republic, the author talks about market failures.
- Externalities Where an external situation defines/effects a group in positive or negative ways. A university resulting in making city hotbed of innovation falls in externality. A factory emitting noise and smoke making neighborhood sick becomes a negative externality.
- Asymmetric Information is found in situations where customers buy medicine with the premise that it is not adulterated. The fear of adulteration will change his buying behavior affecting manufacturers.
- Market power is when a bunch of companies owns the market. It is like Ola/Uber controlling the ride sharing.
- Public goods are the things that are non-rival and non-excludable like breathing air.
I found it worth sharing.