¶ … government regulation is needed, citing the major reasons for government involvement in a market economy.
Markets can serve as efficient methods to distribute and allocate resources. However, there are many cases in which the system can actually produce severe inefficiencies. One problem that the world is currently facing is accounting for externalities; especially in regards to environmental issues and climate change (Tietenberg & Lewis, 2000). Other examples can include monopolistic conditions in which firms can charge more for their products and services than under conditions of competition.
Other inefficient economic conditions that can arise under situations of monopoly or oligopoly are that there are significant barriers to entry in the industry. These barriers are constructed by factors such as high fixed costs, availability of resources, and brand loyalty. Smaller firms that wish to enter the market will not have the necessary resources to compete with these large firms. Also in the oligopoly structure, market shares generally change very little from year to year. Many of the gains made in market share are through acquisitions of smaller competitors in the industry which are then consolidated into the parent firm.
Justify the rationale for the intervention of government in the market process in the U.S.
There are many situations that arise in which government intervention in the markets is definitely warranted. One fairly straightforward example can be provided by services such as utilities, cable, water, and internet services (Michaels, N.d.). Each of these services requires a great deal of physical infrastructure to be developed before the services can be provided. Therefore it would not make sense for companies to compete in these industries because it would require multiple infrastructure systems that would led to massive inefficiencies.
Other reasons that the government should...
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
Capital Budgeting and Government Regulations Airline Industry LONG-TERM CAPITAL BUDGETING IN AIRLINE INDUSTRY Government regulation: Why or why not Major reasons for government involvement in a market economy Interests of stockholders and managers: The convergence Airline: Merger or new capital investment LONG-TERM CAPITAL BUDGETING IN AIRLINE INDUSTRY For profit organizations have shareholder's profit maximization as the main aim to pursue. Traditional managerial economics expects that all projects/investments having positive net present value (NPV) shall be initiated by
A micro considers the interests and rights of the individual company as the primary concern. Both of these views are valid depending on the lens that one wishes to use. The problem arises when the government is forced to develop policies regarding procurement in this volatile debate. The government must decide whether to take a micro view, favoring the rights of companies, or a macro view that places the
The same survey quoted by Ries noted that 92% of respondents do not trust online companies to keep personal information confidential and 82% believe that the government should regulate use of personal information by online companies. (FTC Study, 2-3) If companies do not respond, not only will business stand in danger of being over-regulated by the government, but also consumers may not trust sites and withdraw their business. This was
Governments should limit their interference in market progress. The recent Presidential election was billed as a choice between two visions for America. Unfortunately for voters, there are many other visions that were not presented as viable options. If those options had been presented, voters may have chosen them. One such alternative political philosophy is libertarianism, which makes the case that government should interfere as little as possible in the daily lives
Government Solicitation Developing a Federal Acquisition Team: Reverse Engineering a Standard Forestry Project to Determine Team Requirements FAR Provisions The selected project is controlled by the Forestry Department, which is part of the Department of Agriculture, placing the project under the auspices of Chapter 4 for the Federal Acquisition Regulations, which themselves make up Title 48 of the Code of Federal Regulations (e-CFR, 2012). Relevant paragraphs include a provision that all Head of
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