In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
In the figure,
D: Demand curve for automobiles
S 1 : Supply curve of automobiles prior to regulation
S 2 : Supply curve of automobiles after regulation
FG: Clean up cost per unit
-Restrictions on the types of food additives that breakfast cereal manufacturers can use is an example of a social regulation.

Question

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
  In the figure,
D: Demand curve for automobiles
S 1 : Supply curve of automobiles prior to regulation
S 2 : Supply curve of automobiles after regulation
FG: Clean up cost per unit
-Restrictions on the types of food additives that breakfast cereal manufacturers can use is an example of a social regulation.

Quizplus · Accepted Answer

Social regulations focus on protecting public welfare, including health and safety standards, which encompasses restrictions on food additives to ensure consumer safety.

In the Following Figure, the First Panel Shows a Market