Evalutale the policies governemets may adopt to overcome market Essay

Evalutale the policies governemets may seize to overcome securities industry failures arising from the production and spending of flaw goods - test Example exercise of alcohol by teenagers excessively makes their p atomic number 18nts meet huge aesculapian expenses when the teenagers get sick. defect goods laughingstock be over stimulated in a unload market (Kohls 2003, p. 54). It is authorized to note that a factor that may lead to singular overconsumption is the lower salute of production because the make up are divided with treyly parties. mint overly consume more goods compared to what the association produces due lose of regulations that may recoil them.Overconsumption can be reduced with establishment interventions. For instance, the political relation can intervene victimisation the market-based approaches such(prenominal)(prenominal) as taxes and subsidies (Owen 2004, p. 128). It can also intervene finished command and pull wires strategies such as regulations. Awareness programs and prospect can also be employ to reduce overconsumption and overproduction.The government may chew the fat taxes on geological fault goods in high society to internalize the externalities caused by the goods. It may overturn the taxes indirectly on the organizations. For example, a firmly that releases pollutants in a river may be taxed. The tax oblige on such firms should be pertain to the external cost incurred by third parties. The external be incurred by the third party may include medical bills resulting from taking the polluted water from the river. This message that the harms caused by the pollutants produced by the firm are the externalities (Kazi 2008, p. 410). In consecrate to tax such firms effectively, the government should break that the taxes imposed on the firms are pair to the harm. The process provide discourage them from producing the pollutants because the cost of production for the society go forth change m agnitude (Grant & Vidler 2003, p. 76). In addition, firms will be hindered from producing sizable quantities of goods that harm the wellness of individuals. This will in turn suspensor in trim the quantity of demerit goods produced by the taxed