The Obesity Crisis as Market Failure: Analysis of Causes and Corrective Mechanisms

The obesity crisis as
market failure an
analysis of systematic
causes and corrective
mechanisms

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Market imperfections and market failure can affect entrepreneurship activity...........................1
Market imperfections and market failure affect labour and financial products using relevant
examples......................................................................................................................................2
Government’s economic policies can shape business strategy....................................................3
Government’s economic policies can shape business decisions.................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Obesity is a medical condition in which excess body fat has accumulated to the extent that it
may have an adverse effect on health. It is defined by body mass index (BMI) and further
evaluated in terms of fat distribution via the waist–hip ratio and total cardiovascular risk factors.
It affects the health of an individual negatively and also reduces their quality of life. Present
report will lay emphasis explain how market imperfections and market failure can affect
entrepreneurship activity. It will also focus on how market imperfections and market failure
affect labor and financial products. Assignment will also discuss a logical interpretation of how
the government’s economic policies can shape business strategy. It will also interpret how
government’s economic policies can shape business decisions.
MAIN BODY
Market imperfections and market failure can affect entrepreneurship activity
In order to achieve success entrepreneurs needs to bring creative and innovative ideas
according to the needs and demands of consumers. It has been analysed that that imperfections in
market can create opportunities for entrepreneur as well as it can also affect the entrepreneurship
activity (Lusk, 2017). The case study has provided with the details that imperfections in the
market for food have contributed to obesity. The market failure has given rise to more and more
population becoming overweight. It has been analyzed that obesity is been increasing because of
the free market entry of new start up company’s who is been involved in selling junk food in
order to only provide delicious food to consumer without taking care of the health outcome of
consumers. It has also been analyzed that obesity is also been caused because of the economic
trends. The restaurants and hotels are charging high price for the nutritious food and also less
price for the junk food.
It has also been analyzed that consumer is only involved in buying that food which contains
high calories and cholesterol level as it tastes better than the healthy food. This has hugely
affected the health outcome of consumers as this type of food is selling at low price. It has been
analyzed that nutrition and health are considered as less important than the taste and price of
food. These imperfections in market have highly affected the entrepreneurial activities. This
inexpensive food has contributed to the weight gain. According to the research it has been
analyzed that market is functioning effectively and not well, the consumer is been involved in
utilizing their individual capabilities. In the market failure there is need for the corrective
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