Government regulation can improve economic efficiency if _____.

Question

Quizplus · Accepted Answer

Encouraging uncompetitive markets to act competitively can improve economic efficiency by promoting fair competition, preventing market power abuses, and stimulating innovation and productivity. Regulators can achieve this by implementing antitrust laws, breaking up monopolies, and reducing barriers to entry. B, C, and D might be valid in some cases but are not generalizable as effective mechanisms for improving economic efficiency through government regulation. Regulators might not always have private information firms do not have, might not be able to coordinate inter-industry actions effectively, and might not be able to capture the full range of market participants' preferences accurately.

Government Regulation Can Improve Economic Efficiency If _____