When markets fail, public policy can
a. do nothing to improve the situation.
b. potentially remedy the problem and increase economic efficiency.
c. in theory, remedy the problem, but in practice, public policy has proven to be ineffective?
Inability to influence the customer and other buyers of the commodity in the market is called as market failure. So when markets fail, public policy can potentially remedy the problem and increase economic efficiency. market failure can occur due to some external factors like government regulating the course of product by its laws.
