Market failure happens when economic conditions cause a market to be unable to reach supply/demand market equilibrium.  Market failure can be either complete or partial. In complete market failure, there’s no supply for a good at all. Market failure, however, is most often associated with a partial market failure.  In this instance, the price and quantity of the good does not match the point at which the good’s supply and demand curves intersect. This results in an inefficient allocation of resources. A number of factors can contribute to a market failure. Some of these factors are negative and positive externalities, monopolies, impairments or immobility of production inputs, and market information breakdowns. Minimum wage laws are often cited as an example of impairment or immobility of production inputs that cause market failure.  Often, the minimum wage is set higher than the equilibrium market price for a particular job.  Those critical of minimum wage laws argue that this causes employers to hire fewer employees for these particular types of jobs. The price and quantity do not match.  The result is an increase in unemployment, which then creates a social cost to society.