The primary reason for government regulation of business is

Question

Quizplus · Accepted Answer

The primary reason for government regulation of business is market failure. Market failure occurs when the market fails to allocate resources efficiently, resulting in societal problems such as negative externalities, public goods with no private incentives for production, and information asymmetry. Regulations are put in place to ensure that businesses act in the best interest of society and to correct these market failures. Hypercompetition and lobbying efforts by business are not the primary reasons for government regulation, and central planning of the economy is not typically practiced in a market economy.

The Primary Reason for Government Regulation of Business Is