Why do producers have more interest in government regulations than consumers do?
Government regulations are those laws and rules which are used for placing limitations on businesses to get the outcome expected. Regulations are a type of intervention in an economy which exists for the purpose of ensuring public safety, national security, welfare of the society and protection of the environment. Some examples for the same are government imposing price control regulations on privatized monopolists in industries such as telecommunications, gas or rail transport. Another example could be setting a rule for a nation's minimum wage.
There are three kinds of government regulatory policies which are devised to control a firms behavior which are :
- Social regulations : These are aimed at improving the level of health and safety in a country
- Economic regulation : These are aimed to regulate the natural monopolies in a market
- Antitrust policy : These regulations are aimed at preventing monopolies and increasing competition in those markets where firms crave for competition and to prevent a cartel to be formed in an industry.
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