Regulations & Market Structures

Regulations & Market Structures

Industrial Regulations

The term “Industrial Regulations” can be defined as the government regulations for the entire industry. The main reason behind the development of the industrial regulations is to control the manufactures of the goods and services so that they cannot exploit the customers by increasing the prices of the products and to avoid the creation of monopoly. The term “Economic Regulations” can be defined as a kind of government regulations which assist the government in influencing the activities and behavior of individual and industries of private sector. The industrial regulations affects the market as they limits the activities and operations of the industries. The industrial regulations compel the companies to provide quality products at reasonable prices and also force them to keep supplying the products which brings equilibrium in market (Ciliberto et.al 2009).

In any given economy, different types of market structure exist such as perfect competition market, monopoly and oligopoly. These entities are affected by the industrial regulations because if there are barriers to entry in the market then the perfect competition is not expected to remain in shape. The industrial regulations assist in removing the barriers to entry and exist to design the perfect competition. The industrial regulations also assist in shaping the natural monopoly and decomposing the monopoly which is harmful for the costumers. The industrial regulations also regulate the prices of the products which compel the entities of different market structure to adopt different marketing and selling tactics (Fraja et.al, 2006).

Social Regulations

The term social regulation can be defined as the policies and rules which are designed for addressing social issues such as product safety, pollution, worker's safety and social discrimination among the members of the society. There is a big need to address the above mentioned social issues because these have crucial impact on the society. The regulations for product safety ensure that the consumers are having products which are not harmful for their health. The industries used to emit the carbon dioxide and other harmful gases which cause pollution which in turn affects the quality of human life. The social regulations make sure that the industries must adopt latest procedures which are helpful for omitting fewer amounts of harmful gases (McConnell et.al, 2008).

There are certain entities which are affected by the social regulations such as employers and employees of different fields and natural monopolies. If the governments adopt strict social policies for the workers safety then the employers will witness increase in expenses as they will be required to provide good quality of safety equipment to all workers. It affects the employers negatively and employees positively. If the social regulations are strict for pollution negligence then there are fair chances that the employers will be paying off heavy amounts in claims against pollutions or they will purchase new equipments which are more environmental friendly. In both cases, the cost of doing business for the employers increases.

Natural Monopolies

The term “Natural Monopolies” can be defined as type of monopoly that does not ...