Respuesta :
Markets will work to prevent harm only through information supplied by the existence of market failures. this is better known as the first-generation problem .
An ineffective distribution of commodities and services on the open market is referred to as market failure. Additionally, the group does not experience rational outcomes as a result of the individual incentives for rational action. In other words, everyone chooses the best choice for themselves, but the group suffers as a result of those choices. This is represented in conventional microeconomics as a steady state disequilibrium, where the quantity supplied is less than the quantity required.
The majority of economic justifications for government action rest on the premise that the free market is unable to handle externalities or provide public goods. Programs for public health and welfare, education, infrastructure, research and development, domestic and international security, and a clean environment have all been classified as public goods.
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