[ioufqmuz] Economic failure at both ends of scale

Big businesses famously exhibit market failure with monopolistic behavior.  They also politically influence regulation intended to prevent that market failure.

But small business, especially tiny businesses, also see similar failure, where it becomes too expensive to effectively enforce regulations on lots of tiny entities.  They also don't play the market efficiently because of the cost of information gathering.

Prostitution is an interesting example, though it might be a special case.  It seems to exhibit failure at both ends of scale.  Is a prostitute (or, for that matter, non-prostitute) making an efficient employment decision?  On the opposite end of scale, are regulations concerning prostitution socially optimal, or are they a result of political stupidity?