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Government regulation and taxation generally have the effect of increasing final costs for consumers. Regulations often impose compliance costs on businesses, which can include fees for permits, costs for adhering to safety and quality standards, and expenses related to environmental compliance. These added costs are frequently passed on to consumers in the form of higher prices for goods and services.

Taxation also plays a significant role, as businesses are often taxed on their profits, and this taxation can lead them to raise prices to maintain profitability. Both government regulation and taxation can therefore create additional financial burdens that are ultimately reflected in the prices paid by consumers.

In contrast, the other potential effects of government regulation and taxation—such as fostering competition or simplifying transactions—are not typically direct results of such measures. While regulations can sometimes level the playing field, they can also create barriers to entry for smaller businesses, and taxation often complicates financial transactions rather than simplifying them. Thus, while there can be some specific scenarios where regulations have positive effects, the overarching impact is more commonly felt in the form of increased costs for consumers.