Your housemate has just asked you: "What does the title of this class you are taking 'Public Policy in Private Markets' mean? Why would we need public policy in markets for private goods? Wouldn't the market work better without government involvement?" Answer him/her by briefly explaining:

a. 3 reasons why government regulation could improve performance in these markets (i.e. what market imperfections and market failures can it correct?).

b. 3 reasons why government regulation could harm performance in these markets (i.e. what sources of government failure are there?).