Identify three government market failures and describe their effects Essay

Identify three government market failures and describe their effects. As in past government failures in the world - Essay Example In the end, there is market failure because the market fails to regulate itself to achieve economic efficiency. Market failure results when the government interferes with the market, often for its own good and success, rather than that of the economy. On the contrary, market failure may also happen owing too government inadequacies if it fails to, or insufficiently, intervenes. ‘Passive government failure’ refers to a scenario when government intervention would cause a socially beneficial mix of output. The housing bubble, BP oil spill, and payment of welfare benefits are three past government failures in the world that have had drastic effects on the economy and society. The global financial crisis, typified by the housing bubble is a good example of market failure. The downturn born of the housing bubble was a significant market failure that resulted from underpricing of risk, which a form of market distortion (Bernstein 1). There was an incorrect valuation of opportunity costs and risks. Pricing is a primary building block of capitalism, which demands that correct and important information about a market are provided in a timely manner. People borrowed into high-priced mortgages because of the underpricing of credit. It was either a case of ignorance about the market, because the only way they would pay off the high-priced mortgages is if the prices of houses continued to increase. Unfortunately, the bubble did not continue to inflate, prices plummeted, and many citizens were unable to service their debts. According to Bernstein, the profit motive coerced the actions of the lenders, because it is highly unlikely that they did not foresee such a ma rket failure. It is the duty of government regulatory bodies to enforce regulatory functions to prevent the housing bubble. The Federal Reserve and a myriad of government agencies focused on the

Individual Strategy Assignment Essay Example | Topics and Well Written Essays - 1750 words - 1

Individual Strategy Assignment - Essay Example Value proposition, which states the specific benefits that a product or service provider offers the customer, is a necessity for every organization. Indeed, a company that lacks a clear and singular value proposition is similar to an individual without energy and power, and, therefore, lacks the ability to champion the occurrence of various aspects. Additionally, it is only through the value proposition that a company is able to convince the customers that indeed the products and services offered are the best among the other competitors and that the customers should only make purchase choice on their products and services. Apple is such a company with great brand and value proposition. Based on the above perspective, this paper discusses the development of Apple’s value proposition and factors supporting the value proposition including organizational task statements. One critical aspect that every company or organizations put in the minds of the consumers is that their lives will improve significantly by the purchase of the company’s brand. Such is usually the idea that centers on company’s brand building. However, in the case of Apple, the company has gone overboard by creating products that seem like consumers must have. Additionally, in building their brand, Apple works on establishing an idea in the minds of their customers that there were no products and services like any other in the market, and as such, the customers never had an alternative but to buy their products. Ideally, Apple success rests in the building of assets that distinguish them from the rest, enabling the consumers no any alternative to their products. As such, Apple has developed its value proposition with a perception on the consumers’ minds that Apple’s products and services remain the best in the industry. Whenever a customer asks for a reason as to why they should buy a particular company’s product or need their service, the company’s value proposition