In an overregulated market, these decisions are made by government administrators after protracted deliberations. Consumers wind up paying more than they wish for some services whose service quality is set too high, and do little for other goods and services whose quality is set too low. Prices are the central form of information in a competitive market. When bid up, prices help encourage entry. When bid down, prices encourage exit.
Prices set too high encourage over investment and entry.
Prices set too low discourage investment and entry. Under competition, markets determine how much is supplied for each good and services in each market. Under excessive government regulation, government officials do. Prices and quality of service adjust to make up the difference. An old theorem is economics holds that if, you try to restrict any one of these elements, the other two will respond accordingly in a manner that the net result is harmful to both businesses and consumers.