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Problem 24

What is deregulation? Name some industries that h…

03:31
Problem 23

What is price cap regulation?

Answer

Antitust 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.
cost-plus regulation is a regulation regarding approach to calculate the price of utilities. Here the
price of utilities is fixed by authorities and firms could only charge that price for the time period of
the regulation.


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Video Transcript

price cap regulations. By definition, they are kind of ah, it's a type of regulation in which the regulator sets a maximum price of firm can charge over the next few years, basically telling a company he you cannot charge above this price sort of like a price ceiling. But it was also common practice to require private prices that declined over time. Now, if the firm waas from good enough and were was able to decrease or reduce costs, you know faster than the price decline, then they would be able to make profits every period. No. However, if they were not, then they would incur losses in the market.

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