Chapter 9.3, Problem 2R

To determine

To state: Advantages and disadvantages of government control of business.

Explanation of Solution

	Regulation	Deregulation
Advantages	Regulations are significant as they provide a set of direction and instructions to the businesses to perform. It structures the operations of the business. Had regulations not been imposed on the businesses, many companies can indulge themselves in unethical practices.	It is considered a good thing because entry barriers are reduced a certain point thereby allowing new companies and innovations to enter the market which, then, helps in providing customers with a wide variety of alternatives to choose with. It helps in increasing investment opportunities leading to a better economic growth
Disadvantages	Along with advantages, it also has some disadvantages. If the regulations are stricter, it will increase the cost of the business. Also, it makes it difficult for the business to change according to the change in the demand. Therefore, most of the times, regulations create problems for the business.	Deregulation impacts the lower section of the society who cannot afford new, innovative products because the businesses are more concerned with the profits and not the well-being of the society.

Economics Concept Introduction

Introduction: Regulations are the set of rules that are imposed on businesses.

Deregulation is the process of removing government regulations from a particular product or service.