The market on its own may not always provide the optimal mix of goods and services due to market failures such as externalities, public goods, and information asymmetries. These issues can lead to an inefficient allocation of resources, necessitating government intervention to correct the market's shortcomings.

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The Market

Question 14

Multiple Choice

The market

A) On its own may not always provide the optimal mix of goods and services.
B) Always provides the optimal mix of goods and services.
C) Always provides a better mix of goods and services without government intervention than it does with government intervention.
D) May not produce the optimal mix of output,which is known as government failure.

Correct Answer: