9. Federal Regulation of Business

9. Federal Regulation of Business - 9 Federal Regulation of...

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9. Federal Regulation of Business Two reasons for government regulation of the private sector: 1) Flaws in the market mechanism 2) Social and political reasons Flaws in the market mechanism 0. Natural monopoly 0. one firm can supply a product cheaper than anyone else 1. local public utilities 1. Natural-resource depletion 2. to safeguard future supplies 3. oil, water 2. Destructive competition 4. dominating companies may engage in unfair or destructive competition 5. price fixing 3. Externalities 6. costs of production born by society 7. cleaning up pollution 8. industrial safety 9. health hazards 4. Inadequate information 10. includes information about warranties, contents, disclosure of financial info to investors Social, Political, and Other Reasons 5. Socially desirable goods and services 11. provide things that would not be produced otherwise 12. clean air, clean water, toxic waste disposal 6. Protecting individual rights and privacy 13. has always been a cause of the federal government 14. safe working conditions 15. investor protection from fraud 16. regulation of health care 7. Resolution of national and global problems 17. response to problems that can’t be solved by state or local governments 18. regulation of railroads, banks, pollution food, discrimination 19. correct unfair trade practices in foreign countries 8. Regulation to benefit special groups 20. special interest groups always pressure congress 21. as diverse as steel manufacturers to farmers to the disabled 9. Conservation of resources 22. agricultural lands 23. forests, lakes, mountains 24. endangered species The Legal basis for Government Regulation of Business 10.
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