The domestic market failure argument is a particular case of the theory of

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The domestic market failure argument is a case of the theory of the second best. In this case, a market failure exists in the domestic market, and the solution may not necessarily be the first-best solution of perfect competition and complete information. Therefore, policymakers must consider second-best solutions to address the market failure, such as regulatory intervention or trade policies.

The Domestic Market Failure Argument Is a Particular Case of the Theory