rnment can intervene, in the form of the welfare system, where the results of the price mechanism cause difficulties. For example in the drive for efficiency companies may have to lay off staff to make way for technological advances in the production line, for example robots on car production lines. The government offers unemployment benefit to those who are out of work, this eases the financial burden. They offer opportunities to re-train people for jobs that have a shortage of supply. They may also offer subsidies to companies' equivalent to the benefits of installing the machines, to keep people employed. The government also encourages companies to set up factories in certain areas by giving them tax incentives. All these things help boost the economy, and make up the difference to create a successful free market economy.Conclusion...
