Good morning, Is this a possible drawback of government intervention, it is not contained within the answer booklet but is in the textbook (not under drawbacks but under benefits of the free market). Governments may try to correct misallocation of resources by competition policy to control monopolies and/or restrictive practices to control oligopolies. However, this may result in reduced profits which will reduce spending on research and development, which may reduce innovation and growth. This would be a poor outcome for potential output in the longer term. Thank you, Rachael
Hi Rachael, Please can you confirm the question number & date? Question 33 of September 2017 is asking why two mobile phone companies might merge. Richie
Hi Rachael, No worries. And by the way, my apologies for misspelling your name in previous posts! I think your suggested point seems sensible. It's impossible to say for definite what the examiners would have awarded credit for outside of the examiner's report, but in this instance, your point does answer the question and is also covered in the core reading (just under a different heading to that which i imagine the examiners used to set the question). Thanks, Richie
