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1.8 The market mechanism, market failure and government intervention in markets

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Question 24

Which one of the following is an appropriate form of government intervention for the market failure identified?

The introduction of a minimum price to restrict the consumption of a demerit good

The provision of a subsidy to reduce the consumption of a merit good

The allocation of tradable permits to correct positive externalities of production

The use of a buffer-stock scheme to stabilise the supply of a pure public good

1.8 The market mechanism, market failure and government intervention in markets Questions

  1. A Level
  2. /Economics
  3. /1.8 The market mechanism, market failure and government intervention in markets