Fill in the blank.
The purpose of government regulation in a mixed-market economy is to protect _____.
Answer: public interest.
In a mixed-market economy which is considered as the economy with both free markets and states’ involvement, laws are considered as one of the cornerstones aimed at protecting the public. It seeks to correct market imperfections such as excessive market power and dominance by a few firms, negative externalities (for instance pollution and emission of greenhouse gases) and the issue of information asymmetry which may occur in a market where the buyer does not have adequate information of the product or service being sold. There are a lot of convincing regulations that play the roles of keeping fair competition in markets, or standards of quality of products or services, protecting buyer’s rights, and conserving the environment. Besides they give a legal structure to labour relations, financial markets and non-market public goods such as roads, policing and defence. Through a blend of market systems and direct state intervention, regulations in a mixed-market economy work hard to curb the failures that usually come with market systems while at the same time embracing economic liberalization and entrepreneurship.
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