From Longman Business Dictionarymarket failureˈmarket ˌfailure [uncountable] ECONOMICS when a market does not work efficiently, for example because buyers and sellers do not have all the information they require to make sensible decisions, or because it does not take into account costs such as damage to the environmentIf firms refuse to take on more labour because the effective demand for their goods is too low, the government can correct for this type of market failure by increasing demand. → failure
