Industrial Regulations

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Industrial regulation:

This is when the government intervenes and puts up measures which seek to regulate the activities of a particular industry. For instance the government can put a limit on the number of vehicles that can be exported within a certain period. A company which exports beyond set limits will be breaking the law. The government use agencies and law enforcers to ensure that the industry follows the set regulations.

Regulations occur because industries if left alone without regulation would exploit the consumer by charging high prices so as to increase on their profits. Thus the government intervenes so as to protect the customer. Industrial regulations are also brought about by government seeking to protect infant local industries which do not have the financial and economic advantages compared to the large multinational companies. Hence the government restricts importation of the products manufactured by local industries so as to give them a chance to market and sell their products (Giorgi & Noia & Piatti, 2000).

Effects of industrial regulation to the market:

The market reacts differently depending on the goal of the regulatory goals and objectives. If the aim was to protect the consumer by preventing the traders from hiking prices, then the traders might reiterate by reducing the level of production and thus creating a shortage. This usually happens if the producers and the traders were not necessarily making huge profits

If the regulations were put in place after an agreement between the various players in the market, then it will be accepted. As a result products will be sold in a fair and reasonable price hence increasing their demand. Consequently the producers will produce more to satisfy the huge mar...

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...commissions includes: bureau of alcohol and tobacco, and fire arms which regulate abuse and misuse of the substances; equal employment commission which ensures the employment process is not biased; federal highway administration which ensures proper maintenance and good conduct on the highways; federal maritime commission which promotes safety in water travel; and federal election commission which promotes free and fair elections (Wikinvest).

Works Cited

Giorgi Di Georgi & Noia Di Carmine & Piatti Laura, (2000). Retrieved from:

http://fic.wharton.upenn.edu/fic/papers/00/0024.pdf

Riley Geof, (2006). Monopoly and economic efficiency. Retrieved from:

http://tutor2u.net/economics/revision-notes/a2-micro-monopoly-economic-efficiency.html

Wikinvest. Government regulatory agencies. Retrieved from:

http://www.wikinvest.com/concept/Government_Regulatory_Agencies

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