Government policies to respond to monopoly power

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  • Created by: Julian Ng
  • Created on: 18-04-13 03:33
Legislation
Anti-monopoly laws - prevent collusive oligopolies, break up monopoly firms into smaller firms, encourage competitive behavior e.g. not allowing predatory pricing, unfair packaging deals.
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Regulation
Often applies to natural monopolies - insisting that they charge lower prices, provide higher output. Often this requires the government to subsidize the natural monopoly to ensure that it maintains production in the long run.
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Nationalisation
transfer of ownership from private to government sector -
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Trade liberalization
Removal of barriers to international trade - increases level of competition.
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Which is the best?
Legislation and regulation - maintain private sector expertise.
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Other cards in this set

Card 2

Front

Often applies to natural monopolies - insisting that they charge lower prices, provide higher output. Often this requires the government to subsidize the natural monopoly to ensure that it maintains production in the long run.

Back

Regulation

Card 3

Front

transfer of ownership from private to government sector -

Back

Preview of the back of card 3

Card 4

Front

Removal of barriers to international trade - increases level of competition.

Back

Preview of the back of card 4

Card 5

Front

Legislation and regulation - maintain private sector expertise.

Back

Preview of the back of card 5

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