Existence of public good. Existence of externality. Existence of natural monopoly. Prevalence of market power. Information asymmetry. Incomplete market.
When a shortage of a good becomes evident especialy due to over regulation and ways are available to to get the goods and get around the regulations under which they are sold.
Market failure refers to the phenomena where an unregulated economy prevents an effective resource allocation. Some examples may include externalities, public goods, imperfect competition, economies...
