The primary goal of regulation in economics is to enhance social welfare by addressing market failures and promoting economic efficiency.

Market failures such as natural monopolies, externalities, and information asymmetry often lead to inefficient outcomes and require government intervention through regulation.

The Coase Theorem posits that externalities can be efficiently resolved through private negotiations between the affected parties, obviating the need for government regulation.

Antitrust regulation aims to promote fair competition in markets by preventing anti-competitive practices, such as price-fixing, cartels, and predatory pricing.

A local water utility is an example of a natural monopoly because it is the sole provider of water in a specific area, and it is often more efficient for a single entity to provide this service than for multiple competitors to do so.

Price regulation aims to ensure that prices charged by firms are fair and reasonable, preventing excessive profits and protecting consumers from exploitation.

Pollution from a factory is an example of a negative externality, as it imposes costs on others (e.g., health problems) without compensation.

Consumer protection regulation aims to ensure that products and services meet certain safety and quality standards, protecting consumers from potential harm.

The Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), and the Environmental Protection Agency (EPA) are all examples of regulatory agencies in the United States.

Designing effective regulation involves balancing the costs and benefits of regulation, addressing the problem of regulatory capture, and ensuring that regulation is evidence-based.

Regulatory capture occurs when a regulated industry exerts undue influence on the regulatory process, often leading to regulations that favor the industry at the expense of the public interest.

Economic regulation aims to promote economic efficiency, protect consumers from exploitation, and ensure fair competition in markets.

A price ceiling is a maximum price set by the government below the equilibrium price, often leading to shortages and black markets.

Social regulation aims to protect public health and safety, protect the environment, and promote social welfare.

Laws requiring seat belts in cars, prohibiting the sale of cigarettes to minors, and requiring businesses to install pollution control devices are all examples of social regulations.