Monopoly Policies Mind Map
Teacher recommended
?- Created by: Amar Thaker
- Created on: 06-01-13 16:36
View mindmap
- Monopoly Policies
- Tax abnormal Profits
- Tax is insignificant to the monopolies
- The tax can then be redistributed through society
- Reduces incentives
- Nationalisation
- Will produce at the allocatively efficient level of the Market where P=MC
- Does not need to profit maximise
- Changes the Goals of the Firm
- Usually occurs with a natural monopoly
- Industries loss is subsidised by government revenue
- Will produce at the allocatively efficient level of the Market where P=MC
- Regulation
- Means controlling the quality and quantity of products in a particular market or markets through legal means.
- Prevent anti-competitive practices
- Set rules for the operation of the firm in the market
- Reduce barriers to entry
- Problems with regulation
- Regulatory capture- where the regulator identifies the interests of the firm it regulates
- Monitoring costs- in terms of acquiring information
- Credibility of Regulators
- Introduce Contestable Markets
- Prevent anti-competitive markets
- Set standards for goods and services
- Price Controls
- Regulatory bodies impose a maximum price set to MSC.
- Tax abnormal Profits
Comments
Report
Report