Question

Economists readily admit that in settings that involve a monopoly or negative externalities, a potential role exists for _______________________. Group of answer choices

Answer 1

Government intervention

Step-by-step explanation:

In settings that involves monopoly or negative externalities, the government has to intervene. Government intervenes in market when resources are not allocated fairly. The reasons for government intervention is to maximize social welfare and they do this by breaking up monopolies and regulating negative externalities such as pollution. Without government intervention businesses would produce negative externalities with facing any consequences. And some organization would have monopolistic powers and this would lead to reduces innovation, lower trades and reduced resources.