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How governments intervene within the economic and social sectors of the market

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Introduction

How Governments Intervene In this assignment I am going to find how the government intervene within the economic and social sectors of the market. I will be doing this to find out if we are benefiting from this and also if the sectors of the market benefiting are from this as well. I am going to do this by looking at data which we have looked at in class and comparing this to find out the good parts and the bad parts form the government intervening in the market. Intervention is when the government intervenes in a market because it has failed. Intervention happens when the market becomes a failure and there is no longer a use for it, market failure happens because; * Market fails to provide public goods. * The market also fails when there is some degree of monopoly power. * And the market fails when costs of production do not reflect the true costs of society. So the governments will intervene to provide public and merit goods when the market fails to meet society's objectives. The objective of the government is to intervene when the private sector can't satisfy a market so the government must intervene to be able to make this happen; there are a variety of ways in which this can be achieved. ...read more.

Middle

With all of these there good points and bad points, out of the three ways that the government intervene two of them are good and one of them is bad. State prevision is a good thing that they are doing this, because if the market continues to fail and education + health care is not provided then the market will stay bad and there will be a lack of educated people which may be able to meet the societies needs. Also the people that may be the few educated people could get sick and with bad health care they could not recover and help to mend the market. So it is a good thing that the government are intervening in this way. Subsidies are also a good thing because the government give money to the producers; this will then encourage the worker to work harder to get more money and by doing this it will make them have an increase in output and also an increase in consumption. Benefits I think are a bad thing and the government should not intervene in this way. Because by intervening in this way they are giving benefits to the unemployed, ill and people who can not afford the housing rates. ...read more.

Conclusion

They have changed there number because if they kept there old number then people would not think of a service which costs a lot of money. So by changing the number of the service and now people think of a cheap service and now they will have a different reputation with a different number, by doing this they are now not losing as much money if they had not changed. Conclusion The government have three different ways in which they intervene to try and help the market which has failed, these way are state prevision, subsidies and also benefits. By using these they are hoping to try and make the market work again, which two of them are working and this is helping the problem, these are state prevision and the subsidies. But the benefits are slowing things down if anything, and are not going to solve the problem. All that these are doing are encouraging people not to work and just sit at home. The government should stop this if they want to stop the problem and do what is best for the economy. But by intervening in the BT situation they are doing the right thing because they should not be more powerful than the government. ...read more.

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