A Government Failure Occurs When the Government Intervention in the Market

question 15

Essay

A government failure occurs when the government intervention in the market that was intended to correct a market failure actually makes the situation worse. Such a failure could occur for one or more of the following reasons:

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Definitions:

Government

The structure or mechanism by which a society or country is managed and controlled.

Private Business

A business owned and operated by private individuals or groups, rather than by the state or public, typically aiming to generate profit.

Federal Government

The national government of a federated state, which holds the authority to govern at a level above individual states or provinces.