Legal Regulation Essay Example | Topics and Well Written Essays - 1250 words

Legal Regulation - Essay Example In this manner, regulation can be perceived as implementation of policy statements that aim to bring sanity in business by ensuring that there is neutral for all players to benefit (Scherer, 1996).   The State has always regulated companies because it is aware that the safety of the public and their welfare is its priority. If the activities and behaviors of companies or industries are not regulated and reviewed, they can have harmful effects to human health, community structure and financial well being of people. It is plausible to argue that these regulations are put in place with the intention of protecting those people who have set their businesses correctly on the market via acquiring working licenses, inspections and permits that allows them to operate, therefore, the State tries to weed out criminal or undesirable activities that undercut honest industries. The State has always engaged in regulating businesses by stating that efficient and effective business regulation is ne cessary since it propagates situation where the total benefits of some people do not exceed the total costs of others. Government regulations are important since they aim to achieve various objectives. If businesses are not regulated, then there will high standards of malpractices whereby the consumer will be exploited and deprived of his rights. Because of market failures, it is necessary for the government to control and regulate the behavior of firms since market failures can easily lead to market monopoly whereby the market.