In this lesson, we looked at some of the other types of market failure that can exist. Firstly, we talked about one of the manifestations of the violation of the assumption of free entry and exit, that being the way in which some incumbent sellers in a marketplace try to erect barriers to entry into a market, which helps reduce the amount of competition a firm faces, whether it is a monopoly or not. There are various barriers to entry, some supported by government, some illegal, and some perfectly legal. We then talked about natural monopolies, which are typically utilities, in which it makes sense from a standpoint of economic efficiency to have only one supplier in each market. The last section was about the violation of the assumption of perfect information. We spoke of some ways that asymmetric information can be used to gain an unfair advantage in a marketplace, and when and why this information can and will be used.
Have you completed everything?
You have reached the end of Lesson 6! Double check the list of requirements on the first page of this lesson to make sure you have completed all of the activities listed there.
Tell us about it!
If you have anything you'd like to comment on or add to the lesson materials, feel free to post your thoughts in the discussion forum in Canvas. For example, if there was a point that you had trouble understanding, ask about it.