Government intervention designed to address market failure:
A) May either improve or worsen the mix of output produced.
B) Will definitely worsen the mix of output produced.
C) Will definitely improve the mix of output produced.
D) Never has an impact on the mix of output produceD.

Question

Quizplus · Accepted Answer

Government intervention can potentially improve the mix of output produced by correcting market failures such as externalities, uneven distribution of resources, and lack of competition. However, government intervention can also lead to unintended consequences and unintended effects on the mix of output produced, depending on the specific policies implemented. Therefore, it is not definite that government intervention will either improve or worsen the mix of output produced.

Government Intervention Designed to Address Market Failure