Why does the government encourage competition between businesses?
Competition forces creativity, improvement in quality, appearance, reliability, efficiency, innovation, less waste and lower prices. It also induces creation of jobs, higher wages and benefits competing for better employees. Unfortunately today, big business targets the House and Senate committees that oversee different industries. They finance campaigns insuring re-election to committee members in exchange for favoritism allowing them to write their own rules, regulations, and laws within their industry, designed to keep competition out and small business from flourishing and insuring a real, true free market.
What do you call it when corporations own and or control government?
Corporatocracy /ˌkôrpərəˈtäkrəsē/: “a society or system that is controlled by corporations.”In a corporatocracy, corporations use the power of the government to protect themselves by using the regulatory and tax systems to create an anticompetitive environment.The solution usually posed is to remove money from politics. That's treating the symptom, not the disease. Rather, we need to remove much of the power from politics. When corporations can’t use their money to buy government protections, they have to use it, instead, to maximize their competitiveness.A government worth buying has too much power.
What term describe a situation where one company controls an entire industry and is so big and powerful that all of its competitors are destroyed?
This is called monopoly. And it is a very unfavourable condition for the market, company and users. Usually when this happens, governments interfere and break up the company in competitive fragments - done by law, to keep the market space healthy.The most famous monopolies, largely for their historical significance, are Andrew Carnegie’s Steel Company (now U.S. Steel), John D. Rockefeller’s Standard Oil Company and the American Tobacco Company. From the late 19th to the early 20th century these organizations maintained singular control over the supply of their respective commodities. Without free market competition, these trusts effectively set the national price for steel, oil and tobacco.Another famous similar instance was with Bell Labs, where the company was broken into seven independent companies.Such breakups lead to creation of competition in the market that in the end nurture a customer centric system.
What are the typical results of government-imposed price controls on markets?
There are two types of price controls; price floor (minimum price) and price ceiling (maximum price) in the markets.Price floor: The classical example is the minimum wage. Let's say the equilibrium wage for a labor market where supply equals demand is $7 per hour. Now, government intervenes and sets a minimum wage of $8 per hour. You can guess what will happen. People who were willing to work at $7 won't get jobs now because the wage is increased to $8, so companies will employ less people and hence unemployment increases.Price ceiling: The classical example is the rent control. Let's say the equilibrium rent for a 1000 Sq. Ft. house is $1,000 per month. If government intervenes and says, “Let's make it $800 per month, not more than that”, then what happens? More people will be willing to live on rent, but supply of apartments would decrease, hence there will be illegal activities. The people who are willing to pay 1,000 would just pay it without any contract or something. One more things maybe that the apartments are not that good and furnished which they used to be because the owner has a less incentive now to maintain it.—That's why we in economics say, “Government sometimes improve market outcomes”, not every time.There are many debates on the both the things but these are typical results, not fully analyzed ones.
PLEASE HELP......IF THE GOVERNMENT DEREGULATES THE AIRLINE INDUSTRY THEN........?
When Ronald (Raygun) Reagan deregulated the airline industry (1978) he claimed B and to a lesser extent C What actually happened was A. we went from 8 financially healthy airlines to 8 almost bankrupt ones.
Why do government allow some monopolies to exist?
Governments allow monopolies in situations where competition would lead to ruinous competition, extremely inefficient duplication, massive confusion or highly undesirable social outcomes. Common examples include:Taxation - although Mafia-style organizations do try to run in parallelPolice - although private security companies do existMilitary - although private security companies can mess around in other people’s countriesElectricity transmission cables - but not the power stations themselvesRail transport networks - but not the trains themselvesPost - nobody would serve remote populations if profit was the only motiveWater supply and sewage networks - but not the water supply itself, where fake “competition” often leads to bad outcomes anywayRadio frequency spectrum allocation, street naming, internet address allocation, land zoning and allocation - because otherwise there would be chaosIssuing of licenses for driving and certain professions - because quality control is critical for some tasksOfficial communication with other governments