The document discusses different market structures and the role of government in markets. It defines perfect competition, monopolistic competition, oligopoly, and monopoly as the main market structures. Market failures such as inadequate competition, information, or externalities can occur when conditions for perfect competition are not met. The government aims to maintain competition through antitrust laws, regulate non-competitive markets, provide public goods, and promote transparency to improve economic efficiency.

1. Chapter 7: Market Structures

8. 5. Externalities – economic side effect that affects an uninvolved third party. Considered a market failure because their costs and benefits are not reflected in the market price. Negative externalities – harmful side effects, such as pollution or noise - can be corrected by charging a tax Positive externality - beneficial side effects, such as public education - can be corrected with subsidies externalities video