Market Competition - 1030 Words

Industrial regulations are those regulations in which â€Å"the government commissions regulate the price charged by natural monopolists†. (McConnell Brue, 2008, p. 382) These regulations exist to ensure that natural monopolies are not charging consumers monopoly prices which in turn hurt the consumers as well as society as a whole. Industrial regulations affect the market by its regulation of the natural monopolies which in turn protects the markets consumers. These regulations also allow for a fair profit to the natural monopoly by setting a fair rate, protecting its consumers, but also a â€Å"fair return to the enterprises†. (McConnell Brue, 2008, p. 382) In terms of market structure, entities that are affected by industrial†¦show more content†¦This particular Act prevents firms from acquiring the â€Å"physical assets of another firm when the effect would be reduced competition†. (McConnell Brue, 2008, p 376) In addition, the Celler-Kefauver Act of 1950 prohibits anticompetitive mergers. (McConnell Brue, 2008, p 376) The three main regulatory commissions of industrial regulation include the Federal Energy Regulatory Commission, the Federal Communications Commission, and the State Public Utility Commissions. Each regulatory commission regulates a particular area. The Federal Energy Regulatory Commission regulates the interstate transmission of natural gas, oil, and electricity. This is accomplished by setting the rates/charges of the interstate transmission and sale. (Federal Register) The Federal Communications Commission regulates interstate and foreign communications through different types of media including internet, telephone, radio, and satellite. This commission governs this area through â€Å"assigning frequency, power, and call sign for radio† as well as the regulation of areas of media that may be â€Å"deemed indecent or illegal†. (Encyclopedia of Business) Finally, the State Public Utility Commission regulates public utility services. Although individual states ha ve their own State Public Utility Commissions their ultimate goals are to ensure that customers receive reliable and reasonably pricedShow MoreRelatedPerfect Competition : A Competitive Market1068 Words   |  5 PagesPerfect Competition A perfectly competitive market is a hypothetical market where competition is at its greatest possible level. Economists argued that perfect competition would produce the best possible outcomes for consumers. Key characteristics †¢ Perfect knowledge – knowledge is freely available to all participants, which means risk-taking is minimal. †¢ Rational Decision – Maximize their self-interest – consumers look to maximize their utility, and producers look to maximize their profits. †¢Read MorePerfect Competition : The Market Price Of An Product1394 Words   |  6 PagesPerfect competition describes a marketplace that no one participant can set the market price of an exchangeable product. This is generally considered an ideal, rarely found in markets today. There are some approximations, such as online auctions, such as eBay. Such firms’ demand curves are perfectly elastic. These markets are theorized to have an unlimited number of buyers and sellers. There are likewise no barriers to entry or exit. Monopolistic competition describes a marketplace offering differentiatedRead MorePerfect Competition : A Market Structure1942 Words   |  8 PagesWhen trying to top look for a market structure to fit your needs a person should start with perfect completion, monopolistic competition, oligopoly, and monopoly. These four market structure are used by business to aid the businesses in producing and selling products. Perfect competition is described as a market structure that has many sellers and buyers that produce the same product and they are allowed to leave and exit the industry at any time. Free entry and free exit is a crucial characteristicRead MoreMarket Structures : Perfect Competition, Monopoly, Monopolistic Competition And Oligopoly2078 Words   |  9 Pagesintroduce four market structures – perfect competition, monopoly, monopolistic competition and oligopoly, and their determinations of price and output. It also discussed the possibility for firms to generate profit s in the short-run and/or in the long-run within these four market structures. It will be shown in the discussion that both monopolistic and oligopolistic firms are able to generate profits in both short-run and long-run, while firms in perfect competition and monopolistic competition could onlyRead MorePerfect Competition : The Market Price Of An Product1391 Words   |  6 PagesPerfect competition describes a marketplace that no one participant can set the market price of an exchangeable product. This is generally considered an ideal, rarely found in markets today. There are some approximations, such as online auctions, such as eBay. Such firms’ demand curves are perfectly elastic. These markets are theorized to have an unlimited number of buyers and sellers. There are likewise no barriers to entry or exit. Monopolistic competition describes a marketplace offering differentiatedRead MoreThe Company Of Free Enterprise And Market Competition1449 Words   |  6 PagesThe foundation of the United States economy is the foundation of free enterprise and market competition. The competitive market allows consumers to benefit from price reductions, increasing quality, and allowing consumers the freedom of choice. These ideas of free enterprise and market competition are so crucial that they are protected by Congressional antitrust laws. As the Supreme Court has explained, â€Å"Antitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterpriseRead MoreFirms Incentives to Avoid Price Competition in Oligopoly Markets520 Words   |  3 PagesFirms Incentives to Avoid Price Competition in Oligopoly Markets In the UK a few, large firms dominate most industries. These industries are known as oligopoly markets. Oligopoly markets are an example of imperfect competition. It consists of a market structure in which there is a small number of large firms in the industry hence is relatively highly concentrated. Barriers to entry and exit are also likely to exist. In oligopoly markets there is product differentiationRead MoreMonopolistic Competition : Competitive Market Structure1757 Words   |  8 Pages Perfect Competition â€Å"Perfect competition is the market structure in which there are many sellers and buyers, firms produce a homogeneous product, and there is free entry into and exit out of the industry†(Amacher Pate, 2013) Real Life Examples A good example of perfect competition will be foreign exchange market because the currency is homogeneous. As well traders will have access to different buyers and sellersRead MoreCompetition and Markets Module 5 SLP800 Words   |  4 Pages Competition and Markets Module 5 SLP Name: Institution: Competition and Markets Module 5 SLP The firm to be addressed in this case is Travelodge. It is a franchise firm which was founded by Scott king in the year 1939 and later began franchising in the year 1966. It offers exceptionally high quality products and services. In addition to its services, it is committed in its work, enabling it to acquire world-class attention and everybody interested to know more about it and also experienceRead MoreThe Market Structures, Monopolistic Competition, Oligopoly And Monopoly1507 Words   |  7 PagesIntroduction A market is a dynamic and restless institution where commercial dealing between buyers and sellers takes place. There are many companies and businesses that run the market. According to how the firm functions and other factors like the number of competitor firms and the type of products produced, the firm is classified into a particular market structure. The other competing firms in the market structure affect the pricing strategies of a particular firm in the same industry. Based on