Government Regulation - 1301 Words

The purpose of this paper is to assess different types of government regulations, how those regulations affect current market structures while defining the different types of market structures and finally what provisions and laws have been put in place to protect consumers and society from big business and firms choices. Industrial regulation is the government’s attempt to enact laws designed to prevent firms from participating in bad monopolistic practices and to promote competition in the market space. The reason industrial regulation exists is to keep an eye on firms by making sure monopolies don’t start, however if they do or currently exist regulations are put in place to monitor prices and products to make sure society and†¦show more content†¦Economic theory justifies natural monopolies on the basis that consumers can benefit from a monopoly so long as restrictions are put into place surrounding output and high prices of goods by the monopoly. Consumers benefit by being able to purchase a desired product at lower per-unit costs. To provide an example of how natural monopolies are established most often would be surrounding public utilities, such as water, gas and electricity services. It makes more sense for the city or state to take on these responsibilities rather than having multiple firms in the market driving up price and providing lesser goods/services per firm. Economic theory supports monopoly in industries like public transportation and the postal service. Beginning in the late 1800s government began to enact four major pieces of legislation collectively known as the Antitrust Laws. The Sherman Act of 1890 is the founding legislation which states that any firm or individual operating in restraint of trade is committing an illegal act and secondly any person or firm attempting to monopolize or conspire has committed a felony. The first piece of legislation is the Clayton Act of 1914 which directly builds on the Sherman Act by specifying what specific acts are in restraint of trade and attempts at monopolization. Sections of the act outlaw price discrimination, tying contracts, purchase of stock of a rival firm that would cause less competition an d interlockingShow MoreRelatedGovernment Regulation Essay744 Words   |  3 PagesGovernment Regulation Throughout history there have been many different opinions about government regulation. Some believe the government regulates business too much others feel that the government does not do enough. I believe the government is regulating business far too much and furthermore putting businesses out of business and causing many workers to lose jobs. In this paper I will point out the common problems dealing with government regulation. 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