3.6.1 Flashcards
What’s the main method of government intervention to control mergers?
The CMA step in to see whether the merger benefits the consumers or not.
If so continue.
If not stop the merger.
What’s a way for governments to regulate profit for monopolies?
Windfall taxes.
Name a way the government can regulate profit for monopolies?
Price ceilings: A price ceiling is a legal maximum price that can be charged for a product or service
Name a way the government can regulate quality for monopolies?
Certification and accreditation: Certification and accreditation are processes by which independent organizations assess and verify that a product or service meets certain quality standards
Name a way the government can regulate performance targets for monopolies?
Energy efficiency standards: Governments may set energy efficiency standards for appliances, buildings, and vehicles to reduce energy consumption and promote environmental sustainability.
Name 2 methods of government intervention to promote competition and
contestability
o enhancing competition between firms through
promotion of small business
o deregulation
o competitive tendering for government contracts
o privatisation
What’s deregulation?
Deregulation is the process of reducing or eliminating government regulations on businesses and industries.
The aim of deregulation is to promote competition, reduce costs, and increase efficiency by removing unnecessary or burdensome regulations that may stifle innovation and limit economic growth.
What’s privatisation?
Privatization is the process of transferring ownership and control of public assets, services or functions from the government to the private sector.
This typically involves selling government-owned businesses, assets, or services to private companies or individuals. The aim of privatization is to reduce the size and scope of government, increase efficiency and competition, and improve the quality of services or goods provided to consumers.
How do firms enhance competition between firms through
promotion of small businesses?
Joint ventures and partnerships: Large firms can partner with small businesses on joint ventures or partnerships, allowing them to access new markets and technologies while also promoting competition and innovation.
Name 2 methods of government intervention to protect suppliers and
employees
o restrictions on monopsony power of firms
o nationalisation
How the government restrict the monopsony power of firms?
Minimum wage laws: Governments can implement minimum wage laws to establish a wage floor that firms must pay their workers, which can help prevent firms from using their monopsony power to depress wages.
What’s nationalisation?
Nationalisation refers to the process by which a government takes control of privately owned industries or assets and brings them under public ownership and control.
The aim of nationalisation is often to promote public ownership and control of key industries and resources in order to ensure that they are managed in the public interest, rather than solely for the benefit of private shareholders.
