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Why is state intervention after a market failure so rarely successful?

Marketing Dec 26, 2020

Why is state intervention after a market failure so rarely successful?

Expert Solution

To fight back with market failure, government or state take several measures like use of legislation-means that government can manage market failure by implementing legislation that changes behavior; another measure is price mechanism which is designed to change the behavior of both the consumer and producer. Still after applying interventions, sometimes it is more difficult for government to cope up with market failure because future is uncertain and no one knows when and how market takes turn with the change in consumer behavior and preferences.

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