EGT3 Essay Example | Topics and Well Written Essays - 750 words

EGT3 - Essay Example This type of economic regulation may prevent competition in the market. Industrial Regulation has an impact on various entities. For national firms which operate in a monopolistic or oligopolistic market, regulation is a boon. Regulation helps in the development and growth of these industries. An example could be companies working in oil and power sector. Regulation is also beneficial for small and mid size industries which would find it tough to survive in the absence of regulations because of intense global competition and the realization of economies of scale by big international firms. An example is small and mid-size firms in Textile manufacturing. Industrial Regulation has negative impacts on multi-national firms who want to expand their businesses internationally but are constrained due to regulation. An example is regulation on FDI in retail in several sectors. Regulation is also harmful for consumer as a whole in certain sectors where competition would actually reduce prices. However, in sectors mentioned above such as drugs and ammunition, regulation is useful for society as a whole. (Joskow,Rose). Social Regulation implies the restrictions imposed by the government in order to prevent or prohibit harmful corporate behaviour such as environmental pollution and occupational health hazards or to promote desirable behavioral patterns. Social regulation has an impact on almost everybody. This includes the corporate, end-consumers, shareholders and the environment. The corporate have to adhere to certain standards to be in business which have attached costs in the short run. The end-consumers are positively affected as social regulation leads to a better holistic environment. A monopoly is a form of market in which almost all the sales in the market go to a single firm. A natural monopoly is a situation constrained by technology or costs in which it is optimal for the entire production to be done by a single firm.