Question: Can someone explain this concept. I am a bit confused Economic Perspective: Market Failures Are A Necessary Condition for Government Intervention I - Market failures

Can someone explain this concept. I am a bit confused

Economic Perspective: Market Failures Are A Necessary Condition for Government Intervention I - Market failures imply that markets will not maximize welfare of population - Without market failures \"invisible hands" of markets maximize welfare of population ' y In' a well functioning market prices equal marginal social costs Self interested individuals or firms only buy a good or service if individual benefit exceeds price Therefore removing any market transaction will reduce social welfare as for all transactions benefits exceed costs

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