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Assess the main reasons as to why the government regulate business activities in your country

Assess the main reasons as to why the government regulate business activities in your country.

Answers

Abdullahi
1. To provide essential goods and services

2. To provide goods and services that may be unattractive to private investors. This may be as a result of high capital investment compared to the expected returns or it may be as a result of declining profits in provision of such goods and services.

3. To protect the public from exploitation; there are certain goods and services which if left entirely to private sectors to supply, they are likely to lead to exploitation of the public.

4. To avoid abuse of monopoly power; the provision of certain goods and services may attract only one or a few private investors who could end up being monopolist. Therefore, the government may manage to provide such goods and services to bring fair competition.

5. To create employment opportunities. The government may also get involved in investing and production of goods and services in order to create employment opportunities.

6. To manage economy; in many developing countries such as Kenya, many large scale business organization are owned by foreign investors. If this situation is not controlled, the economy of the country could end up being controlled by foreign investors.

7. To enhance efficiency in corporation. Certain services can be operated most efficiently and cheaply only under one business organization.

8. To ensure national security; the production of certain goods and services and their distributions may have security and welfare implications and cannot be left to private sector. Such sensitive industries are left to the government for example production of fire arms and bullets.
Dullayo answered the question on July 26, 2018 at 14:13

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