Do We Need Government Intervention In The Form Of Competition Policy ? If So, Why? Applied And Discuss Based On Case Study Or Research

1715 words - 7 pages

Competition policy aims to ensure, wider consumer choice, technological innovation and effective price competition. If achieved, the above aims contribute to both consumer welfare and to the competitiveness of the industry. The main thrust of competition policy is to ensure that, companies compete rather than collude, dominant companies do not abuse their market power, and efficiencies are passed on to final consumer in the firm of lower prices and better products.In the real economy, is it always necessary for government intervention in the form of Competition Policy?Let's consider The United States Airline Deregulation 1978.This deregulation is seen to be successful, it brought benefit to customers. However, it also raised some problems such as congestion, limited re-emergence of monopoly power and with it, and the exploitation of a minority of customers. So when do we need competition policy?Abuse of market power is best tackled through antitrust policy. Externalities can be reduced through regulation, a tax or subsidy, or by using property rights to force the market to take into account the welfare of all who are affected by an economic activity.Airline Deregulation encouraged competition so there are more discount tickets available. After deregulation, customers benefited from travelling by discount tickets, and saved from $5 billion to $10 billion a year. The best estimates are that deregulated fares have been 10 to 18 percent lower, on average, than they would have been under the previous regulatory formulas. However, the fares varied between markets because prices also depend on the total costs of each flight. Tickets' price on thin routes must be more expensive than that on dense routes. As a matter of facts, not all airlines serve on the same routes, the airline company need to make profit so it will give up on some thin routes, this make potential for one dominant airline to become the only service for many customers - this leads to monopoly power. At that time, full fare was applied for routes supplied by only one or two airlines. When a single airline offer special routes which with no close substitutes, it has the market power to decide the price of its tickets prices. Typically, the monopoly airline will produce fewer services, at a higher price, than would be the case for the entire market under perfect competition. It decides its price by calculating the quantity of output at which its marginal revenue would equal its marginal cost, and then sets whatever price would enable it to sell exactly that quantity. The Department of Transportation found in 1990, for example, that after adjusting for differences in the average length of trip and density of traffic, fares on routes served by the eight most concentrated hubs averaged 18.7 percent higher than for similar markets served by other airports. When deregulation results monopoly power which against public interest, it is important to apply competition policy to re-balance the...

Find Another Essay On Do we need government intervention in the form of Competition Policy ? if so, Why? Applied and discuss based on case study or research

Do you think that the concept of organisational culture is a useful one in the real world? If so, why? If not, why not?

3912 words - 16 pages ) provides a case study of General Electric, focusing particularly on the leadership provided by the CEO, John F. Welch."We want to become a company where people come to work every day in a rush to try something they woke up thinking about the night before. We want them to go home from work wanting to talk about what they did that day, rather than trying to forget about it. We want factories where the whistle blows and everyone wonders where the time

The need for Government Intervention in Education Reform

2611 words - 10 pages advanced skills were taught to the up-and-coming generation so they could become a vital part of their community. The last several decades has greatly expanded the bounds of the 'community' to almost anywhere in the country or anywhere in the world for that matter. Advances in transportation and communication has made the world a much smaller place then the world we knew as children. The skills our children need to realize parents' perpetual dream of

Did Germany deliberately bring about a major war in 1914, and if so why didn't she do so earlier?

2543 words - 10 pages that in 1910 a German Foreign Secretary stated, "If we do not provoke the war, others will hardly do so." (1967 in: Koch, 1972:68, my italics)If this was the prevailing view among Germany's statesmen (about which Geiss does not say) then the motive therefore to back Austria-Hungary in her fight against Serbia would not have been mainly through fear of attack, and so a motive must be looked for elsewhere.Conflicts of Imperialism among the Great

"Do culture and individual beliefs affect logical thinking? If so,how do they influence the conclusions we reach?

1092 words - 4 pages . Reasoning in true sense is guided on the basis of logic. Logic in fact is a system of reasoning. In order to reason out about things, we apply logical thinking to it. Logic is defined as a way of thinking or explaining something on the terms of validity. Logic therefore deals with only the validity of reason and not the truth. It provides the anatomy (analysis) of thought. However, the reasoning of thought is more affected by emotions which are strongly

Why Do We Need Feminism: Women’s empowerment

1354 words - 6 pages unions and fighting back for their rights as workers. Such action will improve the working condition. On a larger scale, national and international laws concerning wage, working hours, working environment, and benefit are necessary. Women have limited power in politics. The low percentage of women participating in politics is almost universal (Atlas, Map 36 “Women in Government,” pp. 96-97). In the mean time, men comprises majority of the policy

This case study is based upon the case article by Peter A. Stanwick and Sarah D. Stanwick titled; ‘Wal-Mart: But We Do Give Them a 10 Percent Employee Discount’, in which addresses the ethical issues...

1472 words - 6 pages Case Study: Wal-MartJune 12, 2012This case study is based upon the case article by Peter A. Stanwick and Sarah D. Stanwick titled; 'Wal-Mart: But We Do Give Them a 10 Percent Employee Discount', in which addresses the ethical issues facing Wal-Mart. According to Stanwick and Stanwick (2009, p. 409), the culture "has created a number of twenty-first-century problems for Wal-Mart."SummaryThe authors' viewpoint is that of the Wal-Mart employees are

Do we need vaccinations?

1368 words - 5 pages INTRODUCTIONI was asked to produce a case study on the topic of "Vaccinations". I was asked to come up with a question relating to the topic of Vaccinations, and the question that I came up with was "Do we need vaccinations?"Firstly, I will be finding out some background information about vaccinations and what their purpose is. I think that people should be interested in answering my question as it could apply to them and affect their health in

Do We Need Literacy?

701 words - 3 pages where to go to get food or work and how to get back. In order to do that you must be able to read.Literacy to me involves both reading and writing. In order to read you must be able to write and in order to write you must be able to read. The world revolves around literacy. It is hard to escape literacy so one piece of advice would be to start learning as soon as you can. It is never too late to learn how to read and write so if you are an adult don?t be intimidated by your age. And if you ever get the chance to teach a youngster how to read, take that chance. Children are the future and we need them to be able to productively read and write.

Why Do We Need To Go To School?

991 words - 4 pages because they will miss their schoolmates, even their best friends if they have one. And by the way, about home schooling, we will discuss it in the other section. Continuing with the school, since a school is a place where we spend 60% or more our time in a week, it is a good tool to increase our social life. Just think of the fact that if we only get home schooling from our parents, we won't have a new friend at all. Well, maybe we can meet a

"Do We Need Labor Unions in America?" and "What are the Advantages and Disadvantages of Union Membership."

957 words - 4 pages not just be lost among the masses. Without them, not only can your voice be lost, but if you don't do things the way they want, the company or whoever is in charge can tell you to take a hike, never giving the opportunity to even voice what you would prefer. It is someone to go to and rely on, which bring us to another great advantage. One can rely on the fact that policy will remain consistent and not be forever changing as any management would

Why do we need to know about history?

811 words - 4 pages History is a study of the past. Either good or bad that happened in the past is history. People think that they should learn their history. And there are so many books and movies about history to let us know. Also history is one of the basic curricula in high school. But not all of us can answer precisely why do we need to learn history? And how does it affect us? It is a question that cannot be answered by one single answer. This can be

Similar Essays

Discuss Competition Between Women In "The Snow Child," And "The Company Of Wolves." If Women Are Subjugated In These Stories, Why Do They Work Against One Another Instead Of Banding Together? What...

1776 words - 7 pages Discuss competition between women in "The Snow Child," and "The Company of Wolves Discuss competition between women in "The Snow Child," and "The Company of Wolves." If women are subjugated in these stories, why do they work against one another instead of banding together? What message does their competition convey? "The Snow Child" and "The Company of Wolves" in "The

Why Do We Need Accounting? Essay

3408 words - 14 pages information on the resources, obligations, performance, budgets, and other activities of the entity (Woelfel, 1995a, p. 3). It furnishes detailed information about costs related to the making of products or performing of services. It is also used for the valuation of inventory, for control, and for decisions. Costs are developed based on historical data with adjustments for expected future changes (Woelfel, 1995b, p. 343). In addition to asset valuation

Are Courts Like A Slot Machine, If So Why Do We Use Such Great Expenditure On It?

1995 words - 8 pages before the courts are unique and similar cases do not always exist, this would lead to ambiguity in the law and that judges when deciding cases are open to a lot of discretion in their judgment.If the judicial system is like a slot machine in which one set of input always leads to a fixed output then why do we even need judges of such high caliber to judge and decide on cases. Why not use a computer or machine which when inputted with the

How Do We Farm If We Must?: Analysis With Peter Singer's Down On The Factory Farm And Stanley Curtis's The Case For Intensive Farming Of Food Animals

2537 words - 10 pages undergo before they are ultimately slaughtered for our use, make up the majority of the commentary on the subject. There seem to be few writers with the audacity to dispute the popular outcry that there is something morally reprehensible in our systematic exploitation of other species. Yet, as Stanley Curtis shows in “The Case for Intensive Farming of Food Animals”, a less emotionally charged examination is likely to be necessary if we have any