Governments can prevent monopolies from charging excessively high prices to limit their profit and ensure consumers pay fair prices, have lots of choice and receive a good quality service
Impact of Intervention on Efficiency
'increasing competition and contestability by deregulating or setting limits to how much prices can change (RPI - X) this ensures firms keep their costs low to maximise SNP
Impact of Intervention on Quality
Government firms aim to maximise allocative efficiency so produce high-quality goods for consumers, however, they are likely x-inefficient due to a lack of competition which reduces choice and high costs reduce quality
