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Market Failures, spill-over effects on third parties arising from the…

- - - - A positive outcome that benefits a third party that did not decide to purchase the particular good
    - - Policies
        
        Command based approach
        
        Bans
        
        Partial Bans
        
        more flexibility than full bans
        
        Quota
        
        less consumption > less externalities
        
        Set below free market level
        
        bidding, queuing, equal distribution etc.
        
        Combination of command and market based
        
        Market based approach
        
        Taxing the output
        
        Tax the production of the goods
        
        increased production cost > less supply > less externalities generated
        
        SG Govn taxes cigarettes, alcohol and cars
        
        Taxing the externality
        
        Creating public awareness
      - Examples