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Market Failure and Government Intervention

1356 Words6 Pages

Market Failure and Government’s Intervene Introduction Adam Smith holds that market is a self-adjust system, which need not outside intervene. However, in reality, many markets are not healthy enough and requiring external help. Body 1.Market failure means buyers and sellers a market cannot maximize the total benefit by them own. Market failure stands for when market cannot allocate resources efficiently to achieve market aim, which is to satisfy customers and sellers, when government is required to intervene the economy (Stanlake, G F, 1976). The following four situations require intervenes from government. 1.1Public goods means goods which benefit the mass and neither excludability nor rivalry, such as roads and bridges. In other …show more content…

Imperfect competition is different with perfect competition, which has several characters.
Perfect competition means in a market no one or two supplier can decide the price, suppliers offer similar products, suppliers can leave with free of charge and there is no barricade for others to enter. A typical example of imperfect competition is monopoly, which there are only one supplier in an industry and supplier control the price. Monopolies often prevent other to enter the market. In this situation, the market is controlled by the only one supplier for reasons, like patenting and policy. Some special industry, such as weapon factory, is monopoly by government (N. Gregory Mankiw, 2003). When imperfect competition happened, either seller or buyer cannot get maximum satisfaction, because people cannot buy what they want, and sell products at expected quantity or price as well. In this occasion, buyer and seller cannot maximize the total benefit. Therefore, government needs to intervene imperfect competition and help market …show more content…

National Health Services cover all residents in Britain by free medical services. Besides, they get the private medical services to substitute the free medical system. These private hospitals serve for people who are high income and have high requirement of healthcare. The free nation health services 81% supported by government budget, and 11% comes from Insurance Taxation. Besides, NHS has a special web “nhs.uk.” people can appoint doctors in the web and get health information from this web. (NHS, 2016) 2.3Policy instruments of National Health Services are a national policy in the UK.

NHS hired 1,300,000 related staff in 2015. There are ten health authorities (SHAs) in England. 150 primary care trusts (PCTs) and 275 secondary trusts. 90,000 of them are doctors on duty in hospital, about35, 000 GP, and 40,000 nurse’s 16,000 staffs (Chinadaily, 2015) NHS helps people in two aspects. One is the web of Community- based primary health care (PCTs). Each resident get one general practitioner (GP) nearby to take care their health and provide they daily medical care. The second way is hospital- based specialist services. This service focus on patient who get hurt or acumen disease and need specialist diagnose, take care even operations in

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