Where the words come from
The definition of market failure — Principles of Economics 2e, OpenStax, licensed CC BY 4.0. https://openstax.org/books/principles-economics-2e/pages/12-key-terms. Changes: "When the market on its own" recast as "Market failure is when the market on its own"; the clause naming externalities as one example dropped.
Supply based on costs and demand on perceived benefits, private and social costs and benefits being equal with no externalities, market failure as not achieving efficient output, and over-production with pollution — Principles of Economics 2e, OpenStax, licensed CC BY 4.0. https://openstax.org/books/principles-economics-2e/pages/12-1-the-economics-of-pollution. Changes: Condensed; the explain on misallocation opens with our own sentence, and 2e's "because either firms do not account for all costs incurred in the production of output and/or consumers do not account for all benefits obtained" is tied to externalities, where 2e places it; the under-production case and the sentence on misallocation are ours, added to state the direction for positive externalities; the term allocative efficiency and its last sentence follow 2e section 8.4 (P below or above MC); the recap's partial and complete cases are ours.
Allocative efficiency: producing less leaves benefits above costs, producing more lets costs outstrip benefits — Principles of Economics 2e, OpenStax, licensed CC BY 4.0. https://openstax.org/books/principles-economics-2e/pages/8-4-efficiency-in-perfectly-competitive-markets. Changes: The flower-market walk-through condensed to two sentences in the first explain; P = MC not used.
Public goods as non-excludable and non-rival, the free rider problem, and a public good never getting built — Principles of Economics 2e, OpenStax, licensed CC BY 4.0. https://openstax.org/books/principles-economics-2e/pages/13-3-public-goods. Changes: The free rider reasoning condensed to "each waits for others to pay" in the partial and complete explain, whose terms (partial, complete, missing market) are ours: 2e 13.3 does not use them; flood defences in place of national defence.
The definition of imperfect information, used for the information gap card — Principles of Economics 2e, OpenStax, licensed CC BY 4.0. https://openstax.org/books/principles-economics-2e/pages/16-1-the-problem-of-imperfect-information-and-asymmetric-information. Changes: "Imperfect information refers to the situation where buyers and/or sellers" to "An information gap is when buyers or sellers"; "the necessary information" to "the information necessary"; the pension example is ours.
The types of market failure: public goods, externalities, market power and imperfect information — The Green Book (2026), HM Treasury, GOV.UK, Open Government Licence v3.0. https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-in-central-government/the-green-book-2026. Changes: The externalities card verbatim from "These occur when market transactions have impacts, either positive or negative, on parties other than the buyer and seller", with "These" to "Externalities"; the market power card recast from "If there are too few buyers or sellers in an industry, then this can lead to businesses pursuing maximum profits at the expense of overall social value"; the public goods card built on "non-excludable and non-rivalrous" and "it is not possible to charge people for using them", with "too little, or none" ours; co-ordination failure, the Green Book's fifth type, left out as it is on no A-level list; the card examples are ours.
Government failure as intervention that itself results in an inefficient allocation of resources — The MHCLG Appraisal Guide, GOV.UK, Open Government Licence v3.0. https://www.gov.uk/government/publications/the-mhclg-appraisal-guide/the-mhclg-appraisal-guide. Changes: Recast from "an existing 'government failure' that itself has resulted in an inefficient allocation of resources" as a definition, for the against term.
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