Answer to Question #190979 in Microeconomics for Jess

Question

Which one of the following government policies is most likely to reduce market failure and to improve the allocation of resources?

A a higher rate of tax on all firms earning profit

B a min price for demerit foods above their free market price

C free market pricing for the provision of public goods

D subsidies paid to all loss making firms to maintain full employment

Answer 1

D subsidies paid to all loss making firms to maintain full employment