To correct for market failure, the government could impose a tax on the producer.

Name: To correct for market failure, the government could impose a tax on the producer.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Imposing a tax on the producer for activities that lead to market failure (such as pollution) can correct for the negative externalities by internalizing the costs, thereby aligning private costs with social costs and leading to a more efficient market outcome.

To Correct for Market Failure, the Government Could Impose a Tax