In a situation where a market failure occurs,
A) any government intervention will improve on the market outcome.
B) there is nothing that the government can do to improve on the market outcome.
C) government intervention might improve on the market outcome.
D) it will always be preferable to have the government intervene in the market.

Question

Quizplus · Accepted Answer

Government intervention might improve on the market outcome, but it's not guaranteed to do so. However, there are cases where market failures can have negative consequences for society, such as environmental pollution or the under-provision of public goods. In these cases, government intervention, such as regulations or public provision, could improve outcomes. It's important to consider the specific market failure and the potential effectiveness of government intervention before implementing any policies.

In a Situation Where a Market Failure Occurs