For which of the following problems can well-designed public policy enhance economic efficiency?
A)both externalities and market power
B)externalities,but not market power
C)market power,but not externalities
D)neither externalities nor market power

Question

Quizplus · Accepted Answer

Public policy can enhance economic efficiency for both externalities and market power. Externalities such as pollution or congestion can be addressed through policies such as taxes or permits. Market power, such as monopolies, can be regulated through antitrust laws or price controls. By addressing these market failures, the market can become more efficient and produce outcomes closer to the socially optimal level.

For Which of the Following Problems Can Well-Designed Public Policy