Unit 2.7 · Role of Government in Microeconomics
Reasons for Government Intervention
AO2
Syllabus Requirement
Governments intervene to earn revenue, support producers and consumers, support households on low income, influence consumption and production, correct market failures, and promote equity.
Assessment Objectives
AO2Application and Analysis
Summary
This topic examines the reasons why governments may choose to intervene in markets. It highlights situations where the free market fails to meet economic goals such as efficiency, sustainability, and equity, and discusses how government actions can address these issues.