The Economics of Public Issues-Keeping the Competition Out Outline

The Economics of Public Issues-Keeping the Competition Out Outline

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Keeping the Competition Out When competition is kept out of a firm, profits rise. Competition is kept out by reducing the number of firms in an industry, therefore less supply of the good = high price. Losers are consumers because they have to pay high prices and have low options, and other firms that are excluded – have to charge less. NYC- number of taxicabs in limited by law, one cab to 600 people, also all mass transit is regulated by the government and when independent jitney operators try to get a license they usually can’t…although it might be beneficial for the economy since NYC loses money on mass transit anyway. US regulates local phone services and prices have gone up 40%, but they
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Unformatted text preview: stopped regulating long distance phone services and competition between companies caused prices to go down 40% • In Mexico there is the Telmex monopoly – phone company – there are no other phone companies and prices are ridiculously high – 10 phones per 100 mexican people. • Poland is second in line with a telephone monopoly having 20 phones/ 100 people. • Amount of law schools in each state except California is regulated by the government to minimize competition. • Real estate agencies have rules and laws that keep set prices, therefore keeping competition out. • In California, the California Barbering and Cosmetology Board “raids” establishments of unlicensed hair braiders....
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