Government intervention

Finally, government intervention is often called for to establish standards by essentially reducing informational market barriers. This is important because the rational individual can only make a decision in his best interest when the information is at hand to make that decision. 

See also Air Pollution Emission Control, Vehicle Energy Management Control Systems Government Intervention in Energy Markets. 

In more recent times the location decision has been influenced by government intervention, e.g. ... 

The quantity of these materials is relatively small compared with the amount of waste high-density poly(ethylene) produced each year. Containers made from HDPE are widely used for detergents, oil, and antifreeze, and enormous amounts of material are used in disposable applications aimually. In principle recycled poly(ethylene) could be used for drain pipes, flower pots, dustbins, and plastic crates. The problem remains, however, that economics do not favour recycling of these polymers and in the absence of Government intervention little or nothing can be done to alter commercial attitudes towards recycling. 

Government intervention is not the only source of price variation between countries. Fluctuations in the exchange rate, price discrimination by the producer and indeed each country s health care system all contribute to perpetuate and extend these differences. 

By contrast, in countries with a small market size, domestic demand is likely to be insufficient to justify large private outlays for R D. Pharmaceutical companies and equity flows available to such companies appear to be attracted to countries in which there is a sizable domestic market or, at least, public policies are favorable to the sale of pharmaceutical products. Thus, smaller countries, which inevitably have smaller domestic markets, tend not to be as well positioned to attract pharmaceutical companies and investment. In addition, such countries are more vulnerable to shortages in the event of national emergencies, such as pandemics. For this reason, some form of government intervention may be required, including government subsidy, public investment in pharmaceutical research, and even direct public production. 

There seems little likelihood of the USA regaining its advantaged low-price position on natural gas without government intervention, given the growing demand for natural gas as a power plant fuel. At the same time, US natural gas prices are likely to continue to show extreme volatility during peak demand periods such as extreme cold or hot weather, swinging between several levels such as fuel oil and distillate equivalence and possibly further influenced by liquefied natural gas (LNG) and Canadian gas flows to the USA. 

Two extreme situations can be foreseen as government intervention is concerned ... 

In these countries, domestic bills are not affected despite an increase in wholesale price levels, and the vertically integrated companies cross-subsidize their retail costs with the profits from the free allocation. In other countries, dominant power generators might anticipate government intervention and thus refrain from passing on C02 opportunity costs to wholesale price levels. 

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