policy options

Question 1

Legislation example?

Answer 1

Legislation for example Competition and Consumer Act 2010 – the Act is administered by the Australian Competition and Consumer Commission (ACCC)

increase competition in markets in order to reduce prices,

increase output & increase total surplus.

buisness practices like cartel

Question 2

What is regulation

Answer 2

Governments can use regulation to reduce or eliminate the market failure associated with monopoly firms

Question 3

PRICE REGULATION IN NATURAL MONOPOLY

Answer 3

This is an industry where it is efficient to have only one firms in the market due to significant economies of scale

EXAMPLES: Utility companies such as the Water Authority and electricity providers

Question 4

Types of Regulations

Answer 4

limit the ability of businesses to compete

limit the number of types of buisnesses

reduce the incentive for buisnesses to compete

limit the choices and information avaliable to consumers

Question 5

What is de-regulation

Answer 5

Remove unnecessary competitoin

Question 6

Example of de-regulation

Answer 6

In 1978, the US government deregulated the airline industry allowing for an increase in competition.