2.7.2—Main forms of intervention

Taxes, subsidies, price controls, regulation, public provision and information policies change incentives, costs, access or rights.

The tool must match the problem: a subsidy may increase consumption but also cost public funds; a regulation may work only if enforced.

Trace the policy through demand/supply or behaviour, then state the implementation condition.

A maximum price below equilibrium can improve affordability for some but create a shortage.

Naming a policy is not evaluating its mechanism.

Complete tool map: a binding price ceiling lies below equilibrium; a binding price floor lies above it; indirect taxes create a wedge and shift supply upward/left; subsidies lower effective producer costs and shift supply downward/right; direct provision supplies services publicly; command-and-control regulation sets required or prohibited behaviour, enforced through legislation. Label stakeholder prices and quantities on each diagram.