An increase in government intervention always leads to a sub-optimal outcome due to the introduction of deadweight loss.

Government intervention can sometimes lead to sub-optimal outcomes because it might create something called deadweight loss. This happens when the government's rules or taxes change the way people buy and sell goods, making it less efficient. For example, if a government imposes a high tax on a product, it might discourage people from buying it, leading to fewer sales than if there were no tax. As a result, both consumers and producers may lose out on potential benefits, like better prices or more choices. While some government actions aim to help, they can unintentionally cause these inefficiencies, making the overall situation worse for everyone involved.