MGEC41H3 Lecture Notes - Lecture 10: Us Airways, Air Canada, Deadweight Loss
24 Sep 2020
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Most of the world call it competition policy. Refers to the body of laws that allow government to regulate competition: laws that let governments regulate competition. Economists have a lot to say and help inform on optimal legal actions: what firms should and shouldn"t be allowed to do using economic reasoning and data to advise government. In market economics like us and canada (traditionally left allocation of goods and services to the private sector, to chose their own prices and trust markets to set things: some are not such as healthcare. Even in market economies where there is usually no government interference, people believe certain industries will not have enough competition which leads to inefficient outcomes. Government can help establish rules to maintain healthy competition through regulative bodies. Bodies issue opinions but the federal court will determine the course of action. Price fixing: aka collusion, deeply problematic as they are decreasing society welfare and are artificially raising prices for consumers.
