Which one of the following is the best definition of government failure?
A) Government Intervention which leads to a loss of economic welfare.
B) Government failing to allocate resources efficiently.
C) Government failing to intervene with the market.
D) Government intervention which fails to have a positive effect on the economy.
I thought the answer was B, but my teacher said it was A. Can someone explain please?
My exam board is edexcel also, so I need an explanation worth 3 marks, not just the correct answer.
Thanks,
Sora