When market failures occur,
A) the invisible had will correct for the market failures.
B) the price system will correct the market failures.
C) people will reduce their consumption.
D) the government can step in to correct the market failure.

Question

Quizplus · Accepted Answer

Market failures can lead to inefficiencies and negative externalities that cannot be addressed by the market. In such cases, government intervention may be required to correct the market failure and prevent harm to society. This can take the form of regulations, taxes, subsidies, or public provision of goods and services.

When Market Failures Occur