Question

If the government increase its regulations on business, production costs godown and firms are able to produce more at all possible prices.Question 14 options:TrueFalse

Answer 1

Answer:

FALSE

Explanation:

Government regulation is needed in almost every industry to prevent predatory practices that are harmful to the consumer, the environment, and the financial system. For example, regulation prevents firms from abusive pricing or cartels. From the firm's point of view, regulations represent a cost, since firms need to adapt to the conditions that the government imposes for companies in that sector. For example, companies that sell oil need to comply with environmental regulations. This generates costs for companies such as employee training, hiring attorneys to interpret legal rules, use of less environmentally harmful technologies during the oil exploration process, among others.