In this case, the average total cost will continue to decline as the scale of production increase, because fixed (or overhead) costs are being spread over higher and higher levels of output" (Natural monopoly, 2010, Tutor2U). According to economic theory, it is efficient to allow for a natural monopoly because competition would require too large of a diversion of available resources for a competitor. When natural monopolies exist, they are often heavily regulated by the federal government. Examples of natural monopolies include local economic entities such as utility companies (electricity, water, gas, telephone, and cable television services). Given the large investment it takes to provide utilities, and the frequent stress upon the environment it is deemed mutually beneficial for all to have such legal, natural monopolies (Crawford 2005).
Today, four major antitrust laws exist. The first was the Sherman Anti-Trust Act of 1890 which forbade the existence of trusts and conspiracies that threatened the free flow of interstate and foreign trade as well as the existence of monopolies in general. Later, the Clayton Act of 1914 specifically prohibited price discrimination (selling the same product at different prices to different buyers), conditional sales that prohibited buyers from dealing with the seller's competitors, acquisitions of competitor companies and interlocking boards of directors. During the same year Congress also created the Federal Trade Commission (FTC) to enforce antitrust law. During the era of the New Deal, the "Robinson-Patman Act explicitly forbade [other] forms of price discrimination, in order to protect small producers from extinction at the hands of larger competitors," and the 1950 Celler-Kefauver Antimerger Act, close loopholes in the Clayton Act (Antitrust law, 2011, West's Encyclopedia of American Law ).
The three main regulatory...
Regulation of Mergers Government regulation of mergers and expansion in the smartphone operating systems market primarily protects consumers and encourages free market competition. There are antitrust laws that protect wireless consumers and promote competition against monopolistic practices. Simply put government regulation is needed to allow more competitors to enter the market. Therefore offering consumers more innovative smartphone operating system choices and options. Another advantage of regulation is to ensure pricing of products is
Competition in these markets, therefore, is unlikely to be on the basis of product innovation. Service innovation is possible to some degree with the Internet, but there are only so many ways to deliver insurance -- it is a product centuries old and not subject to much innovation. In a market like this, service and price are two methods of gaining competitive advantage. Private insurance firms use proprietary actuarial
Competition Laws in Hong Kong Competition is a mainstay in business just as much as it is for any sports team. Businesses, in general, would probably rather that they have their industry all to themselves, but healthy competition drives the market. Without it there would be no need for innovation, and the one company could set the price of goods wherever they wanted to. Therefore, competition is good for a business
This situation once again proves that the people are not considered valuable additions, but commodities. And the management of these commodities changes based on business needs. In terms of the younger employees, their careers -- or their end thereof -- are extremely intensely subjected to the evolution of technology. As a parenthesis, the advent of technology has imposed new standards for the employees in the meaning that they must progress
Considerations supporting increased governmental regulation are based on the possibilities of the industry growing beyond the reach of many if left to be controlled by the market forces. Regulating the industry cushions the consumer against the increase in rates which might impact the economy in terms of reduction in businesses due to the high costs of travel and as well as the reduction in the tourism sector which generates revenue
Competition Comes to the U.S. Farm Sector The United States has always supported its farmers through a number of different policies. This policy has included programs designed to distribute the nation's land in an equitable fashion, increase productivity, raising the standard of living of American farmers and helping them to market their products (Westcott and Price, 2001). U.S. farm policy since the 1930s focused on price and income supports. Until the
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