Government intervention is necessary to control breakdowns in the market mechanism.

Question

Quizplus · Accepted Answer

While the market mechanism is generally efficient in allocating resources, there are instances where it may fail and result in negative externalities (e.g. pollution) or market power abuses (e.g. monopolies). In these cases, government intervention through regulation or antitrust measures can help address the market failures and protect consumer welfare.

Government Intervention Is Necessary to Control Breakdowns in the Market