What is market failure? What will be an ideal ...

[hbsimmons88]

What is market failure?
 
  What will be an ideal response?

Question 2

Why does it seem to be more difficult for investors to measure the capital stock of a firm like eBay rather than a firm like Ford Motor Company? Explain.
 
  What will be an ideal response?

[triiciiaa]

Answer to Question 1

Market failure occurs when resources are misallocated or allocated inefficiently.

Answer to Question 2

Ford Motor Company is likely to have more physical assets like factories, machines and equipment that are easy to measure in market terms. However, a company like eBay may have few such physical assets since a large part of the value of their business is their good will - their reputation for conducting honest transactions and minimizing fraud.

[hbsimmons88]

Thanks for the timely response, appreciate it

[atrochim]

Great answer, keep it coming