Can governments regulate how much profit margin companies can have?

Question

I keep seeing comments about how companies are having record profits, and consumers are paying for inflationary prices. Can governments regualte profit margins as a form of consumer protection?

In: 0

Answer 1

They *can*, it’s just generally not a great idea. Like /u/kzin602 notes, you can do effectively the same thing with tax policy.

Directly trying to regulate profit has a whole bunch of unintended consequences.