Final answer:
An unregulated booster market could lead to monopolistic conditions, with high prices and restricted output. Government regulation helps to prevent this, but regulatory capture can undermine its effectiveness, leading to collusion among firms to maintain high prices and restrict competition. Deregulation introduces its own challenges, including market volatility and labor impacts.
Step-by-step explanation:
An unregulated booster market would threaten competitive balance because it can lead to a condition similar to a natural monopoly, where one provider dominates the market due to high entry barriers for others. In such markets without government regulation, monopolies can set high prices and restrict output, disadvantaging consumers. Government intervention often aims to prevent these outcomes by implementing regulations like price caps; however, regulatory capture can occur, causing regulations to serve the interests of firms over consumers. Firms sometimes collaborate to maintain high prices and limit market entry, harming competition. While deregulation brings more market competition, it also introduces challenges like firm bankruptcies and pressure on labor markets.