Answer:
For government to ensure that the market produces optimal efficient quantity, it should impose corrective subsidies that will help reduce the producers' marginal costs so that they can equal their marginal revenue.
Explanation:
At the output point where marginal social benefit (MSB) equals marginal social cost (MSC), the socially optimal level of output is achieved, because at any other level of output, a market failure exists. But, for firms, when the marginal cost equals the marginal revenue, optimal efficiency is achieved. So, for the government to achieve optimal efficient quantity that benefits the society, it must intervene to help producers equate their marginal costs to the marginal revenue. The government can do this through correct subsidies given to producers.
