scroll to top
Stuck on your essay?
Get ideas from this essay and see how your work stacks up
Word Count: 1,699
Competition policy aims to ensure wider consumer choice technological innovation and effective price competition If achieved the above aims contribute to both consumer welfare and to the competitiveness of the industry The main thrust of competition policy is to ensure that companies compete rather than collude dominant companies do not abuse their market power and efficiencies are passed on to final consumer in the firm of lower prices and better products In the real economy is it always necessary for government intervention in the form of Competition Policy Lets consider The United States Airline Deregulation 1978 This deregulation is seen to be successful it brought benefit to customers However it also raised some problems such as congestion limited re-emergence of monopoly power and with it and the exploitation of a minority of customers So when do we need competition policy Abuse of market power is best tackled through antitrust policy Externalities can be reduced through regulation a tax or subsidy or by using property rights to force the market to take into account the welfare of all who are affected by an economic activity Airline Deregulation encouraged competition so there are more discount tickets available After deregulation customers benefited from travelling by discount tickets and saved from 5 billion to 10 billion a year The best estimates are that deregulated fares have been 10 to 18 percent lower on average than they would have been under the previous regulatory formulas However the fares varied between markets because prices also depend on the total costs of each flight Tickets price on thin routes must be more expensive than that on dense routes As a matter of facts not all airlines serve on the same routes the airline company need to make profit so it will give up on some thin routes this make potential for one dominant airline to become the only service for many customers - this leads to monopoly power At that time full
@Kibin is a lifesaver for my essay right now!!
- Sandra Slivka, student @ UC Berkeley
Wow, this is the best essay help I've ever received!
- Camvu Pham, student @ U of M
If I'd known about @Kibin in college, I would have gotten much more sleep
- Jen Soust, alumni @ UCLA