Detail an instance where free-markets fail to produce an efficient outcome and explain why. Explain why government intervention will create greater efficiency.
(Hint: on a deep level you should be thinking about when/how prices work AND whether the alternative structure to prices, government intervention, would provide any better incentives for efficient allocation. What is the cost-benefit and incentives to each solution?)
Note: you are free to invent a situation of your choosing it does not have to be real-world.
(Hint: on a deep level you should be thinking about when/how prices work AND whether the alternative structure to prices, government intervention, would provide any better incentives for efficient allocation. What is the cost-benefit and incentives to each solution?)
Note: you are free to invent a situation of your choosing it does not have to be real-world.
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