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As an counter argument, explain why government control or regulation may be required to optimize social...

As an counter argument, explain why government control or regulation may be required to optimize social welfare.

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ANSWER: Maximizing social welfare is one of the main common and best understood reasons for government intervention. If there is a market failure, such as an monopoly or externality, government regulation might improve the well-being of society by promoting efficiency. If the distribution of wealth or income is considered to be unfair by society then the intervention of government might achieve a more equal distribution of economic well- being. Government intervention may reduce inequality by redistribution of the resources through transfers and taxes.

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