Controlling Monopolies
- Created by: march_e
- Created on: 27-04-17 09:33
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- Controlling Monopolies
- Privatisation
- Selling off the private sector owners
- Problem= Expensive
- Solution= Nationalisation
- Nationalisation
- State ownership of private assests
- Problem= expensive
- Solution= privatisation
- Price Maximising
- Putting max price at AR means P1 goes to Profit max
- Problem= dynamically inefficient
- Solution= Decrease coporation task so still make profit to reinvest
- Performance targets
- Gov sets targets for quantity and quality
- Problem= businesses can cheat system and find shortcuts
- Solution= keep introducing new targets
- Windfall taxes
- taxing on abnormal profits
- Problem= businesses can falsify records
- solution= gov can threaten and take away money
- Quality standards
- gov set standard qualities to ensure money is spent doing this
- Problem= businesses can self regulate standards
- solution= gov can find businesses that don't have standards
- Lower B2E
- so firms can enter the market
- problem= doesn't work for natural monopoly situations
- Solution= to let smaller businesses to use natural monopolies
- Privatisation
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