Government can use its ability to coerce toward improving economic efficiency by

Question

Quizplus · Accepted Answer

Government can use its ability to coerce by increasing the production of output with external benefits. This is because external benefits are not fully reflected in market prices and therefore the private market may underproduce these goods. By increasing production through government intervention, it can help achieve economic efficiency by promoting the optimal level of production of goods that have positive externalities.

Government Can Use Its Ability to Coerce Toward Improving Economic