One Way a Government Can Eliminate a Market Failure

question 54

Multiple Choice

One way a government can eliminate a market failure

• A)is to regulate the price so that it equals marginal cost.
• B)is to implement a price floor equal to marginal cost.
• C)is to regulate the price so that it is below average cost.
• D)None of the above solutions will eliminate a market failure.

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Definitions:

Continuing Trespass

A permanent incursion onto the property of another.

Remedied

In legal terms, remedied refers to the action of correcting or compensating for a wrong or harm that has been suffered, often through monetary compensation or specific performance.

Vicarious Liability

The legal responsibility of one party for the actions of another, typically an employer being liable for the acts of its employees.

Employer

An individual or organization that hires and pays for the services of employees under an expressed or implied agreement, and has the right to control the details of work performance.