Competition Policy Flashcards
1
Q
Five economic problems governments deal with
A
- Monopoly and Oligopoly
- Externalities
- The underprovision of public goods
- The use of common resources
- Income inequality
2
Q
Why are monopolies and oligopolies disadvantageous to society?
A
Prevent the efficient allocation of resources which causes a deadweight loss.
3
Q
4 Means of government intervention
A
- Regulation
- Competition policy
- Taxes
- Government ownership
4
Q
Regulation
A
Consists of rules administered by government to influence economic activity by determining prices, product standards and the conditions under which new firms may enter an industry.
5
Q
Competition policy
A
Law that regulates or prohibits certain kinds of market behavior.
6
Q
Aims of the SA competition policies
A
- Promotion of efficiency & development of the economy
- Providing consumers with competitive prices & choices
- Promoting employment
- Promoting participation by small and medium-sized firms
- Promoting a wider spread of ownership
7
Q
SA Competition policy in practice
A
- Prevents existing monopolies and other large firms from abusing their market power
- Regulates the growth of market concentration through mergers and acquisitions.
- Prevents the application of restrictive practices, particularly by oligopolies.
8
Q
Restrictive practices
A
Fixing of selling prices;
Collusion with regards to tenders;
Collusion with respect to market shares
