Government Regulation and Competition

Government and Competition Market Power Antitrust Laws Regulating Business Practices Splitting Up Monopolies Assessing Mergers Merger Guidelines

Government and Competition Monopolies such as cable TV companies have a lot of market power. This photo shows an ad protesting a time when Time Warner (TW) cable company blocked a major network from its customers.

Government and Competition The Sherman Antitrust Act formed the basis for later federal policies aimed at supporting economic competition. How did the Clayton Antitrust Act aid trust-busting?

Government and Competition In 1984, AT&T was broken into seven companies that provided local telephone service. What effect do you think this breakup had on the prices of phone service?

Deregulation In the late 1970s and 1980s, Congress decided that some government regulation was reducing competition. It passed laws to deregulate several industries. Deregulation: means that the government no longer decides what role each company can play in a market and how much it can charge its customers.

Deregulation Supporters of regulation and of deregulation both argue that the result is more competition. On the back of your notesheet: Choose one entry from each column and explain how it boosts competition.

Deregulation Deregulation of the trucking industry lowered barriers to entry. That led to the founding of many new small businesses, in which independent truckers owned and operated their own trucks.

Deregulation The average cost of flying generally decreased after the Airline Deregulation Act took effect. Why did airline deregulation lead to lower prices for consumers?