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Page 1

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Regulation

Price capping
RPI- X (efficiency gains)
RPI+K(additional capital spending)
Evaluation
regulatory capture
Time period too short?
setting K/X is difficult
set too high= insufficient funds to complete
Too low=excessive profits

Rates of return
Make profit based on capital then rest taxed on 100%

Evaluation
No incentive to make efficiency…

Page 2

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Sale of state owned shares of firms
Contracting out
Selling of individual state assets
deregulation

Evaluation
Improved efficiency due to the profit motive?
More range of goods from R&D in private sector
Lowe prices due to competition
Enable firms to compete globally
One off payment for gov

Public private partnerships…

Page 3

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Office of fair trading standards: investigate proposed
mergers, abusers of market power and contestability
Competition commission: investigate mergers in regards
to competition rather than consumer welfare, long time
for investigations so prefer to turn a blind eye

Comments

davidsalter

Report

A 3 page summary of how the government intervenes in the market. Suitable for last minute revision.

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