Statement I.Market failure rarely happens under capitalism.
Statement II.One remedy for market failure is public goods and services.

Question

Quizplus · Accepted Answer

Market failure can and does happen under capitalism, as it is based on the assumption that markets are self-correcting and efficient. However, when externalities or market power distort prices and allocation of resources, market failure occurs. One remedy for market failure is the provision of public goods and services by the government, as they are typically underproduced or not supplied by markets. Therefore, statement II is true, while statement I is false.

Statement I.Market Failure Rarely Happens Under Capitalism