Reasons for Government Intervention
Role of Government in Microeconomics
AO2
Syllabus requirement
Governments intervene to earn revenue, support producers and consumers, support households on low income, influence consumption and production, correct market failures, and promote equity.
Assessment objectives
AO2 Application and Analysis
Summary
This topic explains why governments intervene in markets when the price mechanism fails to achieve desirable social or economic outcomes. It covers the main objectives of intervention — raising revenue, supporting firms and low-income households, influencing production and consumption, correcting market failure and promoting equity — and describes common revenue sources and support measures governments use.
