Inefficiencies

Definition

Inefficiencies refer to the factors or processes in an economic system that result in wastage of resources, increased costs, and reduced productivity. Inefficiencies can occur due to various reasons such as lack of competition, government regulations, and outdated technology.

Related terms

Market Failure: Market failure occurs when the allocation of goods and services by a free market is inefficient or unfair. It happens when the forces of supply and demand fail to achieve optimal outcomes.

Monopoly: A monopoly exists when a single company or entity has exclusive control over the production or distribution of a particular good or service, leading to limited competition and potentially higher prices for consumers.

Trade Liberalization: Trade liberalization refers to reducing barriers such as tariffs and quotas on international trade. By promoting open markets, it aims to increase competition, lower prices, and improve efficiency in global trade.