Economic Regulation

Aimee davila

ESSAY 2

Economic regulation, social regulation and antitrust policy have some differences. Economic regulation is when the government allows monopolies usually “natural monopolies” to operate under regulation. These “natural monopolies” have economic regulations which are rules implemented by the government. These regulations keep them from setting high prices on products or services which affects consumers. “Economic regulation” refers to rules that limit who can enter a business (entry controls) and what prices they may charge (price controls)” (library economics liberty). Social regulations on the other hand are government regulations also but have a different objective than economic regulation. The government regulations on social regulations are rules implemented by the government to protect consumers and the environment from market failure. The Food and Drug Administration (FDA) is one example of this kind of government agencies. “Social regulation” refers to the broad category of rules governing how any business or individual carries out its activities, with a view to correcting one or more “market failures.” (Library economics liberty).

Antirust policies were created to help maintain a completive business environment. Antitrust policies stop monopolies from operating and continuing in the market place. Since monopolies are considered harmful to the economy. Monopolies increase their prices on products and services and pay minimal wages. This affects the consumer when it needs to buy products that are a necessity such as electricity and water. When monopolies take out competitive firms the consumer will have to buy from the monopolies. Which monopolies take advantage and maximize their prices for higher profits. The government made these antitrust laws to help the consumers and economy. “Antitrust laws are intended to promote and protect competition, which benefits consumers. Competition leads to lower prices, higher quality, and increased...