Market failure is the situation where there is inability to attain the necessities and the standards of the perfect competition. The main courses of the market failure include externalities, poor resource allocation, abuse of the monopoly power, and the production of demerit goods rather than merit goods ( De Jong, Gilbert, & Stock, 2018) .
To correct a market failure, the government should ensure that there is equal distribution of the public resources and also the fair treatment of all firms in term of taxation. The move aligns with Saint Leo’s core value of responsible stewardship, which enforces on the spirit of application of the available resources to ensure the goals are achieved ( Saint Leo University, 2019) . The goal of the government is ensuring that market failure is corrected. Equitable distribution of resource will ensure that every producer’s cost of production is similar and will also result to equal opportunities among the producers hence the existing monopoly power in the market will be neutralized. The government has applied this method of efficient allocation through the use of equitable federal government resource allocation strategy, this has been helpful because, for a long time the country has never experience any case of a market failure.
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Moreover, the government should play a role in ensuring that substandard cheap goods from the foreign market do not get into the country’s market hence collapsing the local industries. The move aligns with Saint Leo’s values of personal development, which enforces on the need to ensure everyone is committed to their individual progress ( Saint Leo University, 2019) . America’s personal development is the development of its citizens and firms. The government has worked tirelessly on ensuring this is achievable for example, it has restricted products from China, and this move solves the market failure issue in the country since local industries are given room to thrive without external market interference.
Reference
De Jong, J. P., Gilbert, N. L., & Stock, R. M. (2018). First adoption of consumer innovations: Exploring market failure and alleviating factors. Research Policy , 47 (2), 487-497.
Saint Leo University, (2019). History values and Catholic Roots, Retrieved from https://www.saintleo.edu/history-values-catholic-roots
