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There is no way for these two statements to both be true: 1.) Pretty much any regulation harms business. 2.) Also, consumer pays for any regulation costs anyw
by lkrubner 8y ago
There is no way for these two statements to both be true:
1.) Pretty much any regulation harms business.
2.) Also, consumer pays for any regulation costs anyway,
If consumers pay for the regulation, then the business is not harmed. But think about how silly that would sound if you said that to a business person: "Don't worry about government regulations, because your customers will pay for them!"
This is an old fallacy:
"consumer pays for any regulation costs anyway"
Consumers don't pay for regulations except in those situations where demand for a product/service outstrips supply, and therefore the businesses are able to pass the cost along to the consumers. But wherever supply outstrips demand, then the businesses pay for the regulation themselves, via reduced profits and therefore reduced market value.
This is simple supply and demand. It is remarkable that so many people are often mislead on this subject.
- sib 8y ago"Consumers don't pay for regulations except in those situations where demand for a product/service outstrips supply." This doesn't make sense. Demand may outstrip supply at a certain price, but that just means that the price must go up. If a market is clearing, then the regulation (or a tax) will be borne by buyers or sellers in proportion to the relationship between the supply and demand elasticities.
- tananaev 8y agoRegulation harms business (mostly smaller) in the short term. Consumer pays for regulation in the long term.