what is meant by market faiure? briefly discuss the major weakness of the free market economy?

Question

Is government intervention possible in market?

Answer 1

Market failure is the term given to the condition of the free market not producing the result the speaker wants.

For example, say that rents are so high in Manhattan that a specific individual cannot afford to live there. Despite the fact that there isn't a higher vacancy rate than other places even with the high prices, that person would consider it a market failure since he can't get what he wants.

Yes, government can intervene, and they do. By requiring buildings to devote a certain percentage of units to "rent control", they can be had by individuals that otherwise could not afford to live there.

The unspoken truth of this situation is that this results in higher rent on the rest of the uncontrolled units, which forces some of them to live elsewhere and not get what they want, and the right to occupy the rent-controlled apartment becomes a valuable interest, which is often sold when the occupant chooses to move out, meaning that the free market ultimately controls despite the best efforts of fools to believe it to be controllable.

All attempts to control the free market have resulted in a "black market", which is merely the free market outside the law.

The free market is like water. You can't make it flow uphill. You can stop it, you can move it left and right, and you can carry it from a low place to a high place, but it will always flow downhill.