Final answer:
The government's role in protecting the public from market failure, regulating inefficiencies, providing public goods, and reducing negative externalities in a market-based economy.
Step-by-step explanation:
In a market-based economy, the government plays a role in protecting the public from market failure and regulating inefficiencies.
One way the government protects the public is by preventing monopolies, which can hinder competition and lead to higher prices and fewer choices for consumers. By enforcing antitrust laws, the government can ensure that markets remain competitive.
The government also provides public goods, such as roads and libraries, that free markets may not adequately provide. These goods benefit the entire community and would be underprovided if supplied solely by the private sector.
Additionally, the government intervenes to reduce negative externalities caused by economic activities. For example, if an electricity producer emits pollution, the government may require them to install pollution reduction technology or pay fines, ensuring that the costs of pollution are internalized.