2.8 Market Failure Review

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Outline THREE intervention methods available to the government to correct the market failure associated with demerit goods.

Legislations, educational campaigns, indirect taxes

Explain what is meant by the tragedy of the commons and why it causes market failure.

a situation where degradation, depletion or destruction of a common access resource is caused by rivalry and over-consumption.

Outline THREE ways in which stakeholders can address the market failure caused by the tragedy of the commons.

international agreements, legislations, cap and trade schemes, carbon taxes, indirect taxes, educational campaigns etc.

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