Study Notes

Analysing and Evaluating Government Intervention in Markets

AS, A Level, IB
AQA, Edexcel, OCR, IB, Eduqas, WJEC

This study note provides an overview of the different forms of government intervention in markets

Evaluating government intervention - revision video
Government intervention
Indirect taxes - revision video
Producer subsidies - revision video
Maximum prices - revision video

Summary - evaluating government intervention in markets

  • How significant is the market failure? (consequences)
  • Can the market / price mechanism find some solutions?
  • What are the likely consequences of not intervening?
  • How effective is an intervention? (i.e. consider alternatives)
  • Who are the winners / losers from an intervention?
  • Consider the potential for one or more government failures
  • Which works best – market-based or regulatory (“command and control”) approaches?
  • What impact might behavioural interventions have?

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