Question

The government erroneously paid millions of dollars in FEMA benefits to individuals who were later determined to be unqualified. This is an example of government failure. Research a government failure and describe the impact it has had on our economy and citizens and recommend a government action that could have prevented the failure or diminished the impact on society. All sources must be referenced and added in the discussion thread.

Answer 1

In 1970s, Verizon was allowed monopoly power for fixed line telephone services which led to higher prices at astronomical rates and consumer bears the burden. This is classic example of government failure which allowed monopoly markets to sustain for long time.

It creates higher inflation and lower consumption of Telephone services in US as negative externality.

The government must have acted in advance by sending showcase notices to company for violation of Anti Trust laws and banned the services or adopted price ceilings to it to make sure customers benefit from lower prices.

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