Network
Funding can come from taxes or other revenue sources.
3. Asymmetric Information
Asymmetric information occurs when one party in a transaction has more information than the other, leading to potential market distortions.
Solution: Implement regulations and disclosure requirements.
Governments can mandate that sellers provide accurate information about their products or services.
This can include labeling requirements, consumer protection laws, and regulations ensuring transparency.
4. Imperfect Competition
Imperfect competition arises when there are fewer than ideal competitors in a market, leading to market power and potential abuse.
Solution: Antitrust laws and regulations.
Governments can break up monopolies or regulate industries to ensure fair competition.
This may involve preventing mergers that would lead to excessive market power or regulating the prices and practices of dominant firms.
