Question

In the event of a market failure the government may need to get

involved, even in a capitalist (free market economy).
a.true
b.false

Answer 1

In a capitalist or free market economy, the government may need to get involved in the event of a market failure. Market failures occur when there is inadequate competition, inadequate information, resource immobility, and externalities. Government intervention can help correct market failures by implementing regulations, providing public goods, ensuring fair competition, and addressing negative externalities.

Step-by-step explanation:

In a capitalist or free market economy, it is true that the government may need to get involved in the event of a market failure.

Market failures occur when there is inadequate competition, inadequate information, resource immobility, and externalities. These failures can lead to inefficient allocation of resources and negative impacts on society.

Government intervention can help correct market failures by implementing regulations, providing public goods, ensuring fair competition, and addressing negative externalities, among other actions.