Editing Pareto efficiency (section)

===Pareto efficiency and market failure===

An ineffective distribution of resources in a free market is known as [[market failure]]. Given that there is room for improvement, market failure implies Pareto inefficiency.

For instance, excessive use of negative commodities (such as drugs and cigarettes) results in expenses to non-smokers as well as early mortality for smokers. [[Cigarette tax]]es may help individuals stop smoking while also raising money to address ailments brought on by smoking.