It helps markets be efficient, remove market imperfections and correct market failure by increasing competition and incentivising innovation
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What multiplier effect does increased competition have?
It creates a more robust and innovative economy, which increases economic growth
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How can regulation protect people?
It protects consumers from poor conditions and help suppliers in a supply chain where monopsony buyers have market power
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How can regulation create a level playing field?
Socially responsible businesses may face competition from others that cut costs by paying low wages and having poor conditions, but regulation means businesses cannot gain a competitive advantage from this
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How can regulation increase productivity?
Competitive markets make businesses strive to make sales to consumers which makes them efficient, so consumers benefit from lower prices and better products which benefits the economy as a whole as businesses becoming more competitive when exporting
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What is the opportunity cost to the taxpayer of regulation?
Regulatory bodies mean that government expenditure may need to increase to create and run them
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How can regulation be bad for economic growth?
It may reduce businesses profitability which may reduce their ability to invest and grow in the future which can reduce economic growth and penalties may be very costly
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How can regulation increase prices for the consumer?
Legislation that is costly to businesses may be passed onto increased prices for the consumer
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Other cards in this set
Card 2
Front
What multiplier effect does increased competition have?
Back
It creates a more robust and innovative economy, which increases economic growth
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