What is market failure, why might it occur, and how might it be remedied? Discuss.

These are the instructions given:
Your essay should be no less than 500 words, but no more than 750 words in length. The word count excludes any title or cover pages, figures, tables, graphs, diagrams, and also excludes your bibliography or references list. Put simply, only the substantive part of your essay (introduction, ‘body’ paragraphs and conclusion) will count towards the allocated number of words. You do not need to include an abstract or summary of your essay. Although the structure of the essay is up to you, as a rough guideline, you might want to consider using the following setup for your essay: 1 paragraph for your introduction; 2 to 4 short paragraphs for the ‘body’ of your essay, and 1 paragraph for your conclusion. We suggest you use a standard font type, like Arial or Times New Roman or Helvetica, size 12 font, with 1.5 line spacing.
Introduction and ConclusionSuitable introduction and conclusion paragraphs are written. For example, the introduction ‘sets the scene’; gives background or context to your argument; defines any particular concept(s) where necessary; outlines the path of particular argument you would like to take, and the conclusion summarises with some key points of discussion with the intention of arriving at a reasonably thought-provoking end to the essay.
The discussion section (‘body’) of the essay is crafted in such a way that the reader is presented with a coherent and convincing argument (or set of arguments) that might reasonably persuade the reader to think more deeply or differently about the topic at hand.
The use of one or more real-world examples strengthens the writer’s argument, and helps the reader to see linkages between economic theory and real-world application.
In addition to other sources used, one or more peer-reviewed academic sources (i.e., from academic journals) have been used, and all sources are correctly cited in the text and collated in a bibliography or references list using the American Psychological Association (APA) 7th edition style of referencing.
Some Thoughts About How to Write Your Essay
A general discussion entails arguing for or against something (i.e., looking at different opinions for or against the topic question). It may also take on a more ‘balanced’ perspective, in which, you do not necessarily pick a particular line of argument for or against something, but rather consider both perspectives in a reasoned way. A critical discussion would take this a step further by looking at the strengths and weaknesses of various opinions, which might also include comparing and contrasting various perspectives (i.e., looking at similarities and differences). How you decide to discuss the essay topic is very much up to you, and you are free to choose one or more sources of market failure as you build your discussion accordingly.
PLEASE NOTE: What we are most interested in seeing is the quality of your discussion (instead of the quantity of your discussion) and the type(s) of argument(s) you make, based on the skills, knowledge, attitudes, and values (SKAVs) you have acquired; the real-world example(s) you choose to use, and theoretical and applied evidence you draw on from credible sources (e.g., peer-reviewed academic journals or published textbooks) in developing your relatively short discussion.
Some Ideas and/or Examples to Get You Started
This essay discussion is essentially about the sources of (private) market failure. Think intently about the assumptions of the (perfectly) competitive market model. For instance, there are numerous sources of market failure (e.g., imperfect competition, imperfect information, public goods, and externalities). From the outset, what market failure means for the equilibrium price and quantity traded is very much part of your investigation and essay discussion. Two examples of possible avenues to pursue in your discussion could be as follows: First, think about the role information plays in market transactions. Competitive market transactions rely on there being perfect information or information symmetry amongst buyers and sellers. But, what if there’s missing information or one party to a market transaction knows something that the other doesn’t know (imperfect information or information asymmetry)? What are moral hazard and adverse selection, and why are they important in, for example, the various insurance industries (e.g., health, life, property insurance etc.)? Second, think about the role externalities play in market transactions. Competitive market transactions assume there are no externality effects. But, where a negative externality exists, what role do property rights play? What’s the Coase Theorem? There’s a LOT of scope for you to exercise your critical thinking skills here, and the writing of the essay topic itself helps guide (scaffold) you by asking you to focus on the what, the why, and the how of the essay question posed.
Amount of sources needed is flexible, but preferably 4+ sources. Thanks