📚 Learning Guide
Analyzing Market Equilibrium
easy

What is the primary purpose of government intervention in a market to achieve equilibrium?

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Learning Path
Learning Path

Question & Answer
1
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2
Review Options
3
Learn Explanation
4
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Choose the Best Answer

A

To eliminate competition

B

To ensure fair pricing

C

To monopolize the market

D

To increase supply without demand

Understanding the Answer

Let's break down why this is correct

Answer

The primary purpose of government intervention in a market is to help achieve equilibrium, which is the point where supply and demand meet. Sometimes, markets can become unbalanced, leading to either shortages or surpluses. For example, if there is a sudden increase in demand for a product like bread but the supply remains the same, the price may rise too high, making it unaffordable for some people. The government might step in by providing subsidies to bread makers, encouraging them to produce more bread, which helps lower prices and balance the market. Ultimately, government actions aim to ensure that everyone can access essential goods and services, promoting fairness and stability in the economy.

Detailed Explanation

The main goal of government action is to make sure prices are fair for everyone. Other options are incorrect because Some might think the government wants to stop competition; It may seem like the government wants to control everything.

Key Concepts

government intervention
Topic

Analyzing Market Equilibrium

Difficulty

easy level question

Cognitive Level

understand

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