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Microeconomics, Market failure - Coggle Diagram
Microeconomics
Central problem - Scarcity
requires
decisions to be made
which incur
opportunity costs
made under
Marginalist principle
made by
producers
govt
consumers
affected by
considerations
cognitive biases
Illustrated by
The PPC
leads to the need for
resource allocation between competing uses
via
the price mechanism
involves
the interaction of supply and demand forces
which determines
prices and output
which have
elasticities
under which
market is at equilibrium
which leads to
allocative efficiency/maximum social welfare
Market failure
which is the lack of