Industrial/Economic Regulations
According to the Organization for Economic Cooperation and Development (OECD) defines economic regulations (industrial regulations) as "intervening directly in market decisions such as pricing, competition, market entry, or exit ("Economic regulations," 2002). The main reason for economic regulation is because it is permits the straightforward businessman to succeed in the economy and decrease business relations within the economy from being broken by the illegal activity that takes place (Black, 2010). However, within the economy the market has four different structures that industries are classified under that the government uses to help control the advantages and limitations of supply and demand. The goal of the four structures is to look at how it "affects the outcomes in the market with impacts on the motivations, opportunities, and decisions of economic buyers and sellers through their behaviors within market competition" states Fischer (n.d.). The OECD defines social regulations as an impact on the market as well because it too helps to protect buyers and consumers by ensuring that the guidelines and policies of a business follow in order to supply flexible and easy products that are just as effective at a lower cost (2002). Monopolies
The four structures are perfect competition, duopoly, oligopoly, and monopolies. Monopolistic competition takes place when a business is the price taker over the other competitors that offer the same goods and services because it usually has some kind of advantage in that region such as where the company is located, family owned and always been around which customers have a personal relationship with the company or the location a convenience ("The four market," n.d.). There are oligopolies have a small amount of suppliers...
The pure monopoly market means that there is only one type of that business in an area which in most areas in the nation these markets are power, phone, satellite, cable, and water/sewage companies. Yet, last, there is a pure competition where a firm is usually only a small part of the economy and must keep many competitive prices because they have identical products to offer just like other neighboring businesses in that area ("The four market," n.d.).
The OECD also defines social regulations in the market economy that impact buyers or the public by looking at the businesses' health, safety, environmental, and social consistency to confirm a law is a necessity. The government uses these factors to plan guidelines and look at other tools like marketplace encouragement and goal-oriented advances that are effective by businesses providing the lowest possible costs to the public ("Social regulations," 2002). According to Chin-Ming Lin that in the United States the conversion from a more economic to a social regulatory marketplace showed the basic opinions of the citizens and promotional assemblies support the society's well-being rather than the business, yet policy planning and enforcement of these laws did involve some law suits against businesses that he felt were highly unnecessary (n.d.). Social regulations do benefit the public in either one of two ways because it either forbids a business from distributing harmful products and that have valuable attributes for the consumers for example like having the approved label of the Food and Drug Administration to ensure the product is safe for human consumption…
