Industrial Regulation- Egt1

Topics: Regulation, Economics, Monopoly Pages: 2 (786 words) Published: August 24, 2013
The Sherman Act of 1890 states that trade restraints and monopolies are illegal. The Clayton Act of 1914 was put into place to further outline the illegal activities stated in the Sherman Act, and to outlaw ways that companies may try to develop monopolies. It was later amended by the Celler-Kefauver Act of 1950, which kept a company from merging with it’s competitor to acquire their stock. The Federal Trade Commission Act of 1914 created the Federal Trade Commission, which has 5 members and works with the Department of Justice to regulate the antitrust laws. The Wheeler-Lea Act of 1938 was created as an amendment to the Federal Trade Commission Act. It made the FTC independent from the Department of Justice and also made unfair and deceptive sales illegal. The above are all industrial regulation entities. Industrial regulation ensures pricing fairness throughout any industry according to a specific commodity. It can be put in place by the industry itself or the government as in the entities listed in the above paragraph. It exists to effect market structures and protects the market from firms that may seek to push other firms out of their industry by using unfair pricing practices and also protects the consumers in terms of regulating fair prices and product quality standards. Industrial regulation primarily uses price regulation to reduce the market power of monopolies (which occur when a company is the sole producer and provider of a commodity and their own industry in themselves, and therefore can price their product without any regard to quality or market supply and demand) and oligopolies ( an industry market made up of a few companies that make the same type of product, that as a group act in unison in regards to product quality, pricing and market supply). Industrial regulation also is used to prevent collusion, and increase market competition; it also prevents higher prices and lower output, and encourages innovation and increases in choices for...
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