Competition Essay Example | Topics and Well Written Essays - 750 words

Competition - Essay ExampleThe regulations are put in browse to help reduce the conflicts in the commercial procedures like those of maximizing profits. The entities may require raising the profits and the only way they find to do this is to rising the prices of their products where the burden ends up with the people. The government, on that pointfore, comes in and regulates this to avoid conflicts as well as to ensure that the functioning of the business is taken care of. These regulations come with laws like the stripped-down wage laws which act in the same way as minimum price laws. When this is implemented, workers who produce less than the minimum wages are laid murder leading to unnecessary unemployment. The market efficiency and transparency reduces due to these regulations especially if they work against insider trading. The result of this is that the share price becomes higher than that which would accept been if the insiders were allowed to use their information. Inad vertently, the outsiders who were to be protected ends up paying higher prices for the same shares and loses more than they would actually have lost. These regulations have led to market imbalance in some cases. If the nitty-gritty demanded and supplied is the same and the regulations bring about a fall in the prices, then the supply will reduce and the demand will increase. To solve these imbalances, there have arisen cases of black markets and other dubious means of avoiding the effects of the regulations. Monopoly market structures are the most affected by these regulations as they work independently. The government advocates for the customers to have vex to their information, set the price controls and also regulate their operations in the countries of operations. The effect of these is that new markets are opened that bring about competition and thereby increase efficiency and quality services. There is liberalization which is promoted that leads to the mobility of labor, fina ncial capital, goods and services. These bring about new businesses into the industry and intensify competition. Djankov, Simeon et al, 2002 The competitive market structures are effected finished the laws that govern their operations and competitive strategies. Certain acts are prohibited like setting very low prices to accrue short term losses at the expense of the other competitors so that they may even end up closing down. The regulations also govern the number of similar businesses in a authoritative area. The monopolistically competitive markets have been forced to provide enough information regarding their products. In these markets the consumers have relied on the advertisements which sometimes have given a super attitude of the products. The government regulation has had to control the prices in these firms because in the long run, these firms set prices that are very low to kick out their rivals from the market through their passably differentiated products which is pr ohibited. Sometimes these firms set high prices especially because the marginal cost is less than the price in the long run. In a monopsony, the government full treatment together with a monopsonist consumer to ensure that the partial regulations are in place to work at the right time. The government analyses how the consumer is to be protected and also when there should be the intervention from other sources. The second market structure that also faces regulation is an oligopoly market structure. This market structure involves a situation which falls in between perfect competition and monopoly. It refers to few firms