BENEFITS OF REGULATION
- There is a consumer surplus, as goods and services are provided at a lower price
- There is a minimum quality level reached, and ensures products are safe to use, and there is more innovation.
- Helps improve quality of life for customers and employees, through better products and wages respectively.
- If regulation is co-ordinated, then there will be fair rules for all businesses.
- The flexibility of labour markets in the UK has resulted in lower levels of unemployment and more job creation
DRAWBACKS OF REGULATION
- Regulation can increase the costs ad make it harder to do business.
- It becomes more expensive to create a safe working environment for employees as well as pay them higher wages.
- If firms are not able to collude they will be less capable of increasing market power.
- They will compete on price more which cuts into their potential profits.
- Governments have to spend money to regulate firms (ultimately paid by consumers through tax.