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Harry Bindloss

Regulation: Is one way in which companies are constrained by law. E.g. Maximum pollution
levels or controlling quantity and quality.

Objectives of regulation

Reduce barriers to entry
Introduce contestable markets
Prevent abuse of monopoly power
Prevent anti-competitive practices
How markets should operate (firms are raising prices by…

Page 2

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Harry Bindloss

they don't have enough funds to continue being efficient. However if X is too low then the
firm will make lots of supernormal profits and be taxed. If X is set at a particular rate for a
time period it will not accurately show changes in the market.…




This is a 2 page summary of how and why businesses are regulated by the government. Contains some evaluation but students looking at this for the first time will need further study. Useful for last minute revision.

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