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Problem 34

Do you think it is possible for government to out…

06:34
Problem 33

Deregulation, like all changes in government policy, always has pluses and minuses. What do you think some of the minuses might be for airline deregulation?

Answer

Antitrust laws are the laws and regulations that are imposed by government or authorities to
ensure the increased competitiveness in the market. It also helps observe and control mergers
and acquisition taking place between big or key firms.
The airline deregulation was basically imposed in late 1970 s in country U. There were several
benefits quoted when industry was deregulated like, better supply of service, the increase in
competition, etc. But there some disadvantages as well like significant increase in full fare
ticket price which people buy at emergency or unplanned travels, high losses to some of the
airlines, low wages and salaries in airline industry, etc.


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Video Transcript

Let's talk about the regulating airlines before we discuss the benefits of deregulating airlines and its impact it had on the prices of tickets, the number of passengers flying and also the efficiency of set flights. But they can also have negative consequences. For example, the 1st 2 that come to mind are really just mergers and safety. Without regulations. It is very possible the top firms are top airlines can merge together to create a sort of monopoly. At the end of the day, that can only be so many airlines. So if you have big airlines, having a big portion of the market murders would be, uh, not good for consumers. The second thing is safety. Since it it's more of a competitive market and kind of this competitive nature of reducing your production. Cost Safety is one of those things that can be affected, and you don't really want airlines to start decreasing their safety standards so some regulations are actually needed. And we do. The government does regulate thes safety inspection of airlines, but that is, ah, safety regulations. So do regulating airlines can have negative consequences? Well, asses benefits, and you can't Asai whether more regulations or less regulations is optimal for consumers

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