Question

Competition is the great regulator. This statement reflects that a. when competition is present, businesses have a strong incentive to serve the general public and therefore there is little need for regulation of competitive markets. b. government regulation is the key ingredient of competitive markets and therefore markets cannot be competitive without regulation. c. extensive regulation is needed to assure that businesses will treat consumers properly and serve the interests of the general public. d. when markets are regulated by the government, there is no need for competition among business firms.

Answer 1

Answer: Statement A

Explanation: When the competition is present in the market, all the participants know the fact that a little mistake can lead to a loss of a large customer base. Thus, every firm in the market provide their best facilities and services for the satisfaction of existing customers and attracting the potential one's.

In capital markets, the private owners own majority of resources and the intervention from Govt is minimal and it is a proven fact that the customer satisfaction is maximum in such markets.

Hence the correct option is A.