A commercial laundry discharges wastewater into a river used by anglers and swimmers. The council requires the laundry to keep the discharge below a maximum level. Inspectors check the laundry, and the council can impose a legal penalty when the limit is exceeded.
Explain how the council's policy could correct the market failure caused by the discharge.
83 exam-style questions on AQA GCSE Economics 1.6 Market failure, covering 1.6.1a Market failure as misallocation of resources, 1.6.1b Government intervention, 1.6.2a Defining externalities, and 1.6.2b Positive and negative externalities. Each one has a worked solution and a mark scheme showing where the marks go.