Governments intervene in markets to handle inefficiency. In inefficient markets that’s not the case; some may have an excessive amount of a resource while others don’t have enough.
Another example of intervention to push welfare involves public goods. Certain depletable goods, like public parks, aren’t owned by a person. this implies that no price is assigned to the employment of that good and everybody can use it. As a result, it’s very easy for these assets to be depleted. Governments intervene to make sure those resources aren’t depleted.
Macro-Economic Factors
Governments also intervene to attenuate the damage caused by present economic events. Recessions and inflation are a part of the natural fluctuation but can have a devastating effect on citizens. In these cases, governments intervene through subsidies and manipulation of the cash supply to attenuate the cruel impact of economic forces on its constituents.
Socio-Economic Factors
Governments may intervene in markets to push general economic fairness. the govt. often tries, through taxation and welfare programs, to reallocate financial resources from the rich to people who are most in need. Other samples of market intervention for socio-economic reasons include employment laws to safeguard certain segments of the population and also the regulation of the manufacture of certain products to confirm the health and well-being of consumers.