Why is it that the free markets don’t always work? To many people, merely raising the question is blasphemy. As Churchill said of democracy, a market economy is the worst system – except for all the others.

But why don’t the forces of supply and demand always produce the best prices and quality? And what’s to be done about it?

These questions follow a couple of recent columns on how to sell a home without a broker. One reader asked why brokers’ commissions have held at 6 percent for ages even though these fees are negotiable and there’s a huge oversupply of brokers.

There are lots of other examples of market-force failure:

¢ Medical costs keep rising above the inflation rate, even in communities that are flush with doctors and hospitals competing for business.

¢ Many credit cards carry interest rates in the teens even though consumers have lots of choice and other interest rates have been at rock-bottom levels for years.

¢ Executives’ compensation continues to soar though there are legions of managers who’d do anything for shots at the top jobs.

¢ Mutual fund management fees average more than 1 percent of fund assets and have not fallen even though there are thousands of funds competing for investors and some of the best charge only a tenth as much.

These markets are quite different from one another. But in each, one or more factors has upset the balance of supply and demand. Most often, it’s that consumers are unaware of their power to demand lower prices or they just don’t care.

If you have a good health insurance policy through work, your out-of-pocket expenses may be so small there’s no need to search for a low-cost provider. Even if you do pay a big share of costs, you may not shop around when your child’s health is at stake.

Corporate directors who hire top executives can afford to let pay skyrocket because they’re not spending their own money. And many directors are executives themselves, so they don’t mind seeing pay rates rise.

In real estate, the 6 percent commission has been around for so long that many home sellers just assume that’s what they’ve got to pay. Most have little experience selling homes and are so terrified of making mistakes that they’ll pay far more than the agent’s service is worth.

In some cases, consumers deceive themselves about costs. People sign up for credit cards charging 15 percent because they believe they’ll pay off their bills every month and not have any interest charges. Or they focus instead on the minimum monthly payment and conclude they’re borrowing money cheaply, when they’re not.

Similarly, mutual fund investors tend to think they’ll make such killings that a percentage point or two in costs won’t matter. It does.

In some cases, consumers simply don’t have the information they need to harness market forces to their advantage. Just ask your doctor’s office for a copy of its price list.

But, as most of the examples above show, it often is possible to get a better deal if you’re on your toes – negotiating Realtors’ commissions or getting low-fee mutual funds and low-rate credit cards, for example.

But when market forces fail, better regulation may be the answer. Perhaps credit-card companies should have to display their real rates as prominently as their low introductory rates. Maybe doctors should have to post their prices online.

Public companies should have to make public all details of executive compensation packages, including perks currently hidden. And the government, which is looking at whether the real estate industry is improperly undermining low-cost competitors, should stand firm despite the industry’s political clout.

Government regulation is not popular these days. But it’s a reasonable response when markets fail to deliver the best products and services at the lowest prices.

Good regulation won’t turn America into a socialist state. It will make the free market work better.