Question

a)DistinguishbetweenMarket Failureand Government Failure?

Answer 1

[AI-generated answer — Bot]

Market failure occurs when the free market system fails to produce an efficient outcome, such as when there is an inefficient allocation of resources or when there is a lack of competition. Examples of market failure include monopoly power, externalities, public goods, and information asymmetry.

Government failure, on the other hand, occurs when government intervention in the market fails to produce an efficient outcome. Examples of government failure include rent-seeking, regulatory capture, and the misallocation of resources due to political interference. Government failure can also occur when government policies are not well-designed or when they are implemented inefficiently.