Assignment task: In competitive markets, there are winners and losers. The more efficient firms survive and stay in the market while the less efficient firms eventually exit the market or go out of business. In order to protect firms, or even entire markets, that are competitively less efficient, the government will sometimes artificially support the market price either legally or through subsidies. Do you believe this is something the government should do? Why or why not? What are the costs or benefits, if any, from this type of policy?
Assume that I, as your professor, decide to institute the same type of policy in this Managerial Economics class. I either artificially support your grades by not giving you a grade below B, or I subsidize the grades through some type of point redistribution. Do you believe this is something I should do? Why or why not? What are the costs or benefits, if any, from this type of policy?