Types of government intervention

• What are the main types of government intervention?

  • minimum/maximum prices
  • subsidies
  • taxation
  • pollution permits
  • state provision of public goods
  • provision of information
  • regulations - standards/guidelines
• What can we measure the impact of government intervention on?

  • prices - elastic, inelastic
  • profit - supernormal, subnormal
  • efficiency - productive, allocative
  • quality
  • choice
• Explain what is meant by the shut down point:

  When average revenue doesn’t cover average variable costs - SHUT DOWN POINT —> exit the market