Regulation Flashcards
1
Q
What is regulation?
A
Government rules in markets- aim to influence behaviour of consumers & producers & … correct market failure
2
Q
What are the evaluation points of regulation?
A
👍- Fines- act as deterrent for consumers & producers to ✖️ break law- ALSO revenue collected could be used to compensate victims
- BUT if government corrupt them 💰 may ✖️ be used well
👎- expensive to monitor & enforce- administration costs ⬆️
👍- help asymmetric info gap (1 party knows ⬆️ than other) problem by placing restrictions dangerous/unhealthy goods e.g. 🚬
👎- ⬆️ production costs for firms … ⬇️ competitive in global markets-> outcompeted
