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Government Intervention Occurs In Markets To Essay

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Firms tend to attract consumers by product differentiation and hence, establishing a new brand loyalty so it could result a market outcome that will clash with such values. In addition, there could be conflict of interest between the firms and consumers for the purpose of profit maximization. For instance, quality or ingredients used for the products could deteriorate or harmful but it results in greatest revenue. In order to gain market share, firms may also sell their products at a much cheaper price compared to peers as a result of cheap but harmful ingredients so that the consumer will buy cheaper product to save income. As to achieve objective of firms, they will lower...

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