Governments may intervene in a market because:

Question

Quizplus · Accepted Answer

Governments may intervene in a market in order to redistribute the surplus in that market. This may occur for a variety of reasons, such as to promote equity or fairness, to correct market failures, or to achieve other policy goals. Governments may also intervene in markets in order to increase both consumer and producer surplus, but this is not always the case. Additionally, governments would not typically want to decrease total surplus in a market. Therefore, the most likely option is C.

Governments May Intervene in a Market Because