According to Wikipedia, there are three main causes of market failure: externalities, monopolies and non-excludability. Externalities refer to a situation where the activities of an entity generate side effects for which the entity has made no provision. One example of an externality is pollution generated as a side effect of vehicle operation. Without measures such as road tolls, most people would operate vehicles without regard for the pollution they generate.Know More
Another example of an externality is the pollution that is the side effect of industrial activities. Without taxes, regulations and similar measures, there would be little incentive for industries to make provision for the side effects of their activities, despite their negative effect on others. The concept of externalities is used to justify the intervention of governments and other overarching organizations in market operations, according to David Pannell of the University of Australia. Failure to enact regulations would result in the general society bearing the cost of negative side effects and offenders failing to pay for the cost of their operations. Such offenders could then sell their products at lower prices than they should.
Another cause of market failure is non-excludability. This refers to a situation where individuals or organizations cannot stop non-buyers from obtaining certain products or services. Such products or services are said to display the attributes of public goods. One example is open-source software. Creators of such software cannot stop others from using or even modifying their creation. If the situation is inadvertent rather than deliberate, it would result in underinvestment in the particular product or service.
Monopolies refer to a situation where an entity or a small group of entities gain excessive market power. Monopolies are an excellent example of market failure. Other causes of market failure include the uneven flow of information and lack of property rights, according to the University of Melbourne.Learn more about Investing
The volatility of the stock market varies based on a monthly, weekly, or even daily basis. The stock market is volatile any time there is abundant selling of stocks and wide swingsin prices. High volatility, when points go up and down substantially on a day-to-day basis is abnormal, but the stock market itself can be volatile at any given time.Full Answer >
A "stock market" is any type of exchange where stocks or shares are bought and sold. The term "the stock market" is often used colloquially to refer to the world's biggest stock exchanges such as the New York Stock Exchange.Full Answer >
A bull market most commonly refers to increasing stock prices on exchanges such as the NYSE and Nasdaq. It is also used to describe bond and commodity price increases. A bull market is an indication of overall economic health.Full Answer >
Market environment refers to the levels at which organizations relate to consumers. There are three stages of environments that allow for tiered focuses in terms of corporate planning and execution. Theses various landscapes allow companies to prioritize certain relationships and enhance enterprise connectivity based on different demands from target audiences.Full Answer >