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Business Administration & Management

Business Administration & Management. Mr. Bernstein Regulations Maintaining Competition, pp 165-170 October 2018. Business Administration & Management Mr. Bernstein. Regulations – Worth the Costs?. Business Administration & Management Mr. Bernstein. Regulations – Worth the Costs?

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Business Administration & Management

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  1. Business Administration & Management Mr. Bernstein Regulations Maintaining Competition, pp 165-170 October 2018

  2. Business Administration & ManagementMr. Bernstein Regulations – Worth the Costs?

  3. Business Administration & ManagementMr. Bernstein Regulations – Worth the Costs? President Trump signing Executive Order mandating, roughly, that any new Regulation must be offset with the repeal of 2 existing Regulations.

  4. Business Administration & ManagementMr. Bernstein Regulations which Maintain Competition What is a monopoly? Where do do monopolies exist? New technology (ie Microsoft Windows) High fixed-cost ventures (ie Utilities, Railroads) Former monopolies: Telephone, Post Office Are monopolies illegal? How can monopolies be created within a competitive system? What anti-competitive practices could be economically favorable to large businesses?

  5. Business Administration & ManagementMr. Bernstein Regulations which Maintain Competition How can a business create a monopoly? Lower prices until competitors are bankrupt Collude with competitors Merge with rivals to eliminate competition Offer uneven pricing to drive out local competitors Gaining control of a commodity in a region to create a scarcity (“cornering a market”) Spend heavily on false advertising

  6. Business Administration & ManagementMr. Bernstein The Natural Monopolist with and w/o Regulation

  7. Business Administration & ManagementMr. Bernstein Regulations which Maintain Competition Interstate Commerce Act, 1887 First Federal regulation of monopolies Sherman Act, 1890 Outlawed collusion Clayton Act, 1914 Bans mergers which overly reduce competition Forbids bundling which overly reduces competition Robinson-Patman Act, 1936 Bans price discrimination for same product Wheeler-Lea Act, 1938 Outlaws false advertising FTC – Federal Trade Commission Industry specific agencies list in Figure 7-2 on p. 169

  8. Business Administration & ManagementMr. Bernstein Bankruptcy Legal process that allows liquidation of assets to pay off debts. Chapter 11 Bankruptcy allows continuation of operations while a restructuring of finances is designed and implemented. Bankruptcy laws provide an orderly process which gives potential lenders or investors greater comfort to work with higher-risk businesses. Bankruptcy laws allow restructuring of businesses in a way which is less disruptive to employees and other stakeholders.

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