Quantity Quantity Supplied (Private Supplied (Social Cost) 6000 7500 9000 11,000 14,000 Quantity Demanded Price Cost only) 12,000 19,000 $50 $55 $60 $65 $70 14,000 14,000 17,000 20,000 24,000 9000 5000 1000

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A: * ANSWER :-

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Market Failure Analysis

To understand Market failure, we need to first understand welfare economics. An Italian economist, Vilfredo Pareto stated that allocation of resources in an efficient manner such that an economic change, which harms no one and makes someone better off, indicates an increase in social welfare. It is also called Pareto Optimality, where resources cannot further be reallocated without harming one. This does not apply to those economic changes, which harm some and benefit others. social welfare increases if the utility of any of its members' increases and none decrease in the economy.