Extract D (line 8) states that: 'The structural failure of unregulated modern markets lies in their systemic inability to price long-term environmental externalities, curb the rent-seeking behavior of natural monopolies, or prevent deep regional inequalities in infrastructure.'
Using the data and your knowledge of economics, evaluate the view that direct command-and-control state regulation is always preferable to market-based incentive schemes in correcting market failures associated with environmental degradation, monopoly power, and regional economic disparities.
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.