Question

In 2011, police in Appleton, Wisconsin, shut down a lemonade stand run by two young girls. The girls, who live near the venue for the annual Appleton Old Car Show, were subject to a recent ordinance that barred anyone from selling products within a two-block radius of local events. Local alderman Peter Stueck defended the law, saying, "It's certainly not that Appleton is against little girls setting up their cookie and lemonade stands. But the overall intent of the ordinance was to protect the vendors at these events." Which concept best explains why this law had support to begin with?

Answer 1

Answer: diffuse costs and concentrated benefits

Step-by-step explanation:

From the question, we are informed that police in Appleton, Wisconsin, shut down a lemonade stand run by two young girls as the girls, were subject to a recent ordinance that barred anyone from selling products within a two-block radius of local events.

We are further told that local alderman Peter Stueck defended the law, saying, "It's certainly not that Appleton is against little girls setting up their cookie and lemonade stands but the overall intent of the ordinance was to protect the vendors at these events.

The concept uses here is diffuse costs and concentrated benefits. The main argument is that there will be overpresentation of the concentrated minor interests and the majority interests will be trumped. It should be noted that this concept come into place because of the free rider problem.