Which of the following is an example of government failure arising from the implementation of a maximum price cap on domestic energy tariffs?
A contraction in domestic energy demand
The emergence of excess energy supply in the domestic market
Distortion of market signals leading to energy supplier insolvencies and a reduction in long-term competition
An extension in domestic energy supply as utility companies seek to maintain market share
9 exam-style questions on Edexcel A A Level Economics 1.4.2 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.