ABSTRACT

Regulation may be thought to occur when a government/state exerts control over the activities of individuals and firms (Roemer 1993). The exact ‘action’ is described as the regulatory intervention or regulatory mechanism. Interventions that are used to affect variables such as price and quantity can be categorised as being either:

1 Legal restrictions or controls where participants must conform to legislated requirements. If participants do not abide by these laws, they will face punishment.