Impact of Market Imperfections and Failure on Entrepreneurship and Labor

Business Economics

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
1. using the case study, explain how market imperfections and market failure can affect
entrepreneurship activity?........................................................................................................................3
2. Explain how market imperfections and market failure affect labor and financial products using
relevant examples?..................................................................................................................................4
3. Provide a logical interpretation of how the government’s economic policies can shape business
strategy....................................................................................................................................................6
4. Interpret how government’s economic policies can shape business decisions?...................................6
CONCLUSION...........................................................................................................................................7
REFERENCES............................................................................................................................................9

INTRODUCTION
Business economics is an integral component of ancient economics and is an outgrowth
of financial theory to the real business settings. It is an analytical science in the form of a method
of strategic decision-making and future preparation for management (Barnett, Ziegler and
Byleen, 2015). Among other terms, corporate economics is defined as the application of
economic philosophy to market administration. Business economics is focused on
microeconomic theory in two categories: constructive and normative. The project report is based
on a case study that is related to a case study in which obesity crisis is explained as market
failure. On the basis of it, various tasks are mentioned such as market failure, imperfections and
its impact of entrepreneurs and labors. As well as in further part of report, interpretation of
government’s economy policy is described.
MAIN BODY
1. using the case study, explain how market imperfections and market failure can affect
entrepreneurship activity?
Market failure- Market failure is the financial climate characterized by an ineffective distribution
of goods and services on the market economy. In the event of a market failure, incentive
programs for reasonable thinking do not lead to policies appropriately for the community
(Merigó, Rocafort and Aznar-Alarcón, 2016). In other words, each person makes the right
decision for himself or herself, but that proves to be the wrong decision for the team. In
collective outcome, this sometimes can be shown to be a simple linear imbalance in which the
supply curve does not average the amount requested. Such as in the above mentioned case study
there was condition of market failure in the USA due to obesity crisis and due to which different
obstacles occurred.
Market imperfections- This can be defined as kinds of situation in which an economy of a market
fails to meet standard of competitive market. All real-world economies are hypothetically