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, has proven to be ineffective

Question

Quizplus · Accepted Answer

Markets can fail in various ways, such as through monopolies or negative externalities. Public policy interventions like antitrust laws or taxes/subsidies can potentially correct these market failures and increase economic efficiency. While there may be limitations to the effectiveness of some policies, it is not accurate to say that public policy is always ineffective in remedying market failures.

When Markets Fail, Public Policy Can