EGT1: Relationship Between Regulation And Market Structures

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Running head: REGULATIONS AND MARKET STRUCTURES Relationship between Regulation and Market Structures Rajenna Combess Western Governors University EGT1: Economics & Glob Bus Apps Task 3 03/19/2012 A. Define industrial (i.e., economic) regulation Industrial regulation is the government regulation of an entire industry with the objective of keeping close eye on the industry prices and products to ensure that it does not create a monopoly and take advantage of consumers. Economic regulation is a form of government regulation designed to influence the behavior of industries and individuals in the private sector (McConnell & Brue, 2008). Why industrial regulation exists Industrial regulation exists to ensure that natural…show more content…
This happens when production of the good requires extremely large initial capital investments to even enter the market in a modest way but then producing additional output requires only very modest additional outlays beyond the fixed initial investment. They can be established by a government, form naturally, of by mergers and acquisition. The justification for natural monopolies according to economic theory A single monopoly firm can produce the amounts of goods the consumer demands at a lower total cost in resources than many competing firms can. It is therefore cost effective. According to economic theory monopolies have a tendency to extract natural resources aggressively to consumers An example to support your explanations Examples of natural monopolies include utilities like electric power transmission systems and water supply systems. These industries have very large costs for their infrastructure and it is often inefficient to have more than a single firm in region due to the high cost of duplicating the facilities (Norman, Thisse & Phlips, 2000). D. Summarize the four major pieces of legislation collectively known as the Antitrust…show more content…
Nuclear regulatory commission regulates the nation’s civilian use of byproducts, sources and special nuclear material to ensure adequate protection of public health and safety, to promote the common defense and security, and to protect the environment. The Federal Energy Regulatory Commission ensures that the prices the consumers pay for energy are reasonable and fair. Although it does not set energy prices, it oversees the electricity and pipeline transmission rates between states. Furthermore, it licenses hydroelectric plants not owned by the state. In addition, it also oversees matters regarding to the environment in relation to production of natural gas and hydroelectric energy are adhered to (Norman, Thisse Phlips, 2000). F. Explain the major functions of the five primary federal regulatory commissions that govern social regulation The Equal employment opportunity commission (EEOC); investigates charges of violation, promotes awareness of the

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