This week's discussion is focused on market failures

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This week's discussion is focused on market failures. The professor has pointed out that for the discussion a true market failure is needed. I'll have to explain how the PMC (private marginal cost) and the MSC (marginal social cost) were not truly equal and why. I was thinking of the auto industry as an example (2008) but I think the airline industry in 2020 or 2008 could be used also. I'm just not sure exactly how to explain the PMC and MSC

 

From the Boss

Locate a recent article or event (published within the last year) that highlights your relevant microeconomics topic.

 

"There are two important but detailed concept that must be applied in this discussion. Unfortunately the way this discussion is worded makes it appear that you can easily find news articles that explicitly state that a market failure has occurred and even worst that there has been or must be a so-called Government bailout as a remedy. Government bailouts ARE NOT THE REMEDY FOR MARKET FAILURES!!!!!!!!!

the simple and correct way to identify a market failure in economics is to be able to say that private costs of the firm (industry) DO NOT EQUAL ITS TRUE MARGINAL SOCIAL COST."