Regulation is appropriate if

Question

Quizplus · Accepted Answer

Regulation is appropriate when market failure exists and the benefits of regulation outweigh the costs. This is because market failures such as externalities, asymmetric information, and public goods can lead to inefficient outcomes where the market fails to allocate resources in the best possible way. In such cases, regulation can correct the failure and lead to better outcomes for society as a whole. However, regulation should only be pursued if the benefits exceed the costs, otherwise it may make things worse.

Regulation Is Appropriate If