Should the government intervene in cases of market failure?

The benefits of government intervention are largely dependent on the type of government intervention and the form of market failure it hopes to correct, however it is normally beneficial for the government to intervene when market failure arises. There are many forms of government intervention in a market for example, introducing taxes or subsidies, creating price flaws and price ceilings and banning the sale of the product. When the market fails it usually results in negative impacts for society whether this be negative externalities or lack of consumption, and therefore should arguably be corrected. Due to the nature of markets it is likely that it will be corrected by anything but the government and therefore in most cases the government should intervene when markets fail.

Answered by Gabrielle F. Economics tutor

6178 Views

See similar Economics IB tutors

Related Economics IB answers

All answers ▸

Explain what is meant by PED (Price elasticity of demand)


What is the law of demand?


Explain the possible negative externalities that might arise from the increased use of cars (10 marks)


How to explain a demand and supply graph for a certain good or service


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2024

Terms & Conditions|Privacy Policy