Government Policy and Market Failures Georgia State ….pptVIP

Government Policy and Market Failures Chapter 15 Introduction Should the government intervene in the market? The framework presented might be called the invisible hand framework. Invisible hand framework – perfectly competitive lead individuals to make voluntary choices that are in society’s interest. Market Failures A market failure occurs when the invisible hand pushes in such a way that individual decisions do not lead to socially desirable outcomes. Market Failures Any time a market failure exists, there is a reason for possible government intervention into markets to improve the outcome.