Early in this section, we focused on situations where markets do not respond with products/services that achieve Allocative and Productive Efficiency hence leading to Market Failures. There are a number of strategies for resolving these issues from government intervention to government provision.

Please discuss situations where products are over-produced, or under-produced. The economic circumstances that led to that and the possible solutions to the problem.

Please give at least one example in your explanation of a product/service that is under-produced and over-produced.