ADMN 3400H Lecture Notes - Lecture 5: Universal Service, Natural Monopoly, Price Discrimination
30 Mar 2020
School
Department
Course
Professor
Document Summary
Problem: public policy for business enterprise traditionally rested on antitrust law and economic regulation, ex. Antitrust laws to maintain an acceptable level of competition: ex. Monopoly bargain in return to surrendering regulatory agency power (ex. Pricing, output, etc. : two economic considerations, ex. Monopoly bargains or regional public utility economic advantages of lower costs (economies of scale) resulting from one or limited producers: public interest would be served, ex. Market alternative: results in falling prices, competition compel increase operational efficiency, spur new innovation rather than depend on government for bail outs and subsidies (ex. Rail: drop out of markets where there are none, price discrimination results which is unfair. Airline more routes decided by market and price according to supply and demand conditions: ex. Rail rates fell by 45%(due to such factors as charging less than market rates for bulk shipments directly to shippers)
