B200 TMA02 Essay Example | Topics and Well Written Essays - 1500 words

B200 TMA02 - Essay ExampleThis can lead to inefficiency due to im staring(a) competition, which can dupe many different forms, such as monopolies, monopsonies, trustingnesss, or monopolistic competition, if the agent does not implement perfect price discrimination. OPEC (oil cartel in Middle East is an example of this).Second, the actions of an agent can nominate externalities, which be innate to the methods of production, or different conditions important to the commercialize. An externality occurs when an economic activity causes external costs or external benefits to third party stakeholders who did not directly affect the economic transaction. In a belligerent market, the existence of externalities would mean that either too much or too little of the good would be produced and consumed in terms of overall cost and benefit to society.Finally, some markets can fail due to the record of certain goods, or the nature of their exchange. For instance, goods can display the att ributes of public goods or common-pool resources, while markets may have significant transaction costs, agency problems, or informational asymmetry. In general, all of these situations can produce inefficiency, and a resulting market failure.One cause of market failure is the limited nature of position rights. ... By extending these rights, individuals may be able to prevent other people imposing costs on them, or charge them for doing so. (2000 pp. 152-153)As a result, an agent can have imperfect cover over the uses of its commodity, as the system of property rights that defines this control is not comprehensive. Typically, this includes two basic rights that have more generalized nature - excludability and transferability. Excludability caters to the an agents ability to control who can use its commodity, how much, and for how long - and also the associated costs for doing so. Transferability states the right of an agent to transfer the rights of its commodity from oneness agen t to another, primarily by selling or leasing a commodity, and associated costs associated for doing so. If a system of rights cannot to the full guarantee these at low (or no) cost, then an inefficient distribution can be the consequence.There can be many examples of market failure. In this authors region, for instance, traffic congestion is an example, as driving can be considered to impose hidden costs on other drivers and the society, whereas the use of public transportation and/or other ways of avoiding driving to mitigate traffic congestion would be more beneficial to society as a whole. Other common global examples of market failure may include environmental issues such as pollution and exploitation of natural resources to an excessive extent. The Organization of Petroleum Exporting Countries (OPEC) is, currently, a cartel of 12 countries comprising Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. One of its principal goals