When markets fail, public policy can
A)do nothing to improve the situation.
B)potentially remedy the problem and increase economic efficiency.
C)always remedy the problem and increase economic efficiency.
D)in theory, remedy the problem, but in practice, public policy has proven to be ineffective.

Question

Quizplus · Accepted Answer

When markets fail, public policy can potentially remedy the problem and increase economic efficiency. Public policy interventions such as regulation, taxation, or subsidies can correct market failures and promote economic welfare. However, the effectiveness of public policy depends on the specific situation and the design and implementation of policies. While it is not always guaranteed that public policy can solve the problem, the potential for positive impact exists.

When Markets Fail, Public Policy Can