Government intervention through subsidies always leads to an increase in overall market efficiency by aligning marginal social cost with marginal social benefit.

Government intervention through subsidies can sometimes help improve market efficiency, but it doesn't always guarantee an increase in overall efficiency. Subsidies are financial support from the government to encourage certain activities, like producing renewable energy. When the government provides a subsidy, it can lower the cost for producers, which might lead to more production and consumption of goods that have positive effects on society, such as cleaner energy. However, if the subsidy is too large or misallocated, it can distort prices and lead to overproduction or inefficient use of resources. For example, if the government subsidizes a product that is not in high demand, it could waste money and create inefficiencies instead of helping the market.