Market failure establishes a basis for:

Name: Market failure establishes a basis for:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Market failure occurs when the market cannot allocate resources efficiently, resulting in negative externalities, such as pollution or overuse of natural resources. In such circumstances, the government may intervene by implementing regulations, taxes or subsidies to correct the market failure and achieve socially optimal outcomes. Therefore, government intervention is the most appropriate response to market failure.

Market Failure Establishes a Basis For