deregulation

Question 1

what is dergulation

Answer 1

when governments reduce legal barriers to entry, incentivise more firms coming in, promoting comp

Question 2

graph of deregulation

Answer 2

-same as privatisation, consumer surplus gain

Question 3

advantages and disadvantages of deregulation

Answer 3

-more firms will increase consumer choice, incentive to be allocative efficient
-productive and x efficiency: stay ahead of competitors and reduce waste
-dynamic efficiency: profits to reinvest

-loss of natural monopoly, rise average cost, reduce productive efficiency also wasteful depletion of resources and allocative inefficiency
-formation of oligopolies and local monopolies

Question 4

depends on (deregulation)

Answer 4

-short run more contestable, long run monopolies not contestable
-height of other barriers to entry
-level of gov regulation