How can market failure occur in the market for hybrid automobiles? What could the government try to do to improve the situation?

An unregulated market could produce too few hybrid autos since these cars produce benefits for someone other than the buyers and sellers. As such, the government could provide a subsidy or tax credit to those consumers who purchase hybrid or other fuel efficient autos in an effort to promote more purchases and usage of fuel efficient vehicles.

Economics

You might also like to view...

In the above figure, the economy initially is at point B. Then price level rises by 10. The wealth effect will help

A) move the economy to point A. B) move the economy to point C. C) move the economy to point D. D) keep the economy to point B.

Economics

Explain the role played by technological change in classical growth theory, neoclassical growth theory, and new growth theory

What will be an ideal response?

Economics