Market failure and externatilities (1 Viewer)

[SGSII]

Hi guys,
Would anyone have a simple yet accurate definition of market failure and externalities?
Thanks

 

[albertcamus]

Market failure: Where price mechanism accounts for private costs and benefits of production/consumption but fails to account for the social costs/benefits.

Externalities: The social costs/benefits borne by producers/society that are NOT reflected in the price mechanism and can be positive or negative.

 

[SGSII]

Thanks a bunch!