Why does the US government create regulatory agencies? Check all that apply. a. to create fair competition between producers b. to limit the knowledge of certain consumers c. to allow producers to have greater freedom d. to protect consumers' health and safety e. to prevent the formation of monopolies

Question

Social Studies

Leyla Coleman

2 March, 21:33

Why does the US government create regulatory agencies? Check all that apply. a. to create fair competition between producers b. to limit the knowledge of certain consumers c. to allow producers to have greater freedom d. to protect consumers' health and safety e. to prevent the formation of monopolies

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Answers (1)

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Ellie Bullock · Answer 1

To prevent the formation of monopolies.

AND

To protect consumers' health and safety

Explanation:

To understand this, we'll look at a scenario where there is no market competition. If one company alone is providing the customers a product, that company might try abusing it's power. By abusing, I mean the company owners might think "We have no competition so we can raise the prices very high." Which is correct they can do whatever they want because the customer has no choice but to buy from that company. The company can also be selling low quality product, or something that is injurious to health. This means that there is a monopoly, meaning, this company has a lot of power which it shouldn't have. So the US government made regulation agencies to keep an eye on such companies to make sure they follow the law and do not abuse their power.