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It is costly for businesses to comply with government regulation. More regulation increases per-unit production costs...

It is costly for businesses to comply with government regulation. More regulation increases per-unit production costs for businesses and shifts the aggregate supply curve to the left. Deregulation will reduce per-unit production costs and shift the AS rightward. Discuss one business and the impact sustained by regulation or deregulation of the industry and how the business model has been affected and/or potential implications. I want to do health care and cant find anything on it.

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Regulation: The U.S. government is responsible for different types of regulations. These include economic and social regulations. Economic regulation sets prices or conditions for firms to enter a specific industry. Examples of regulatory agencies that provide these types of conditions are the Federal Communication Commission or ECC. Social regulation deals with the protection of individuals through an agency such as the Environmental Protection Agency (EA) or Consumer Product Key Commission (CPSC).

Privatization occurs when government lets businesses to take ownership of a public function and this is initiated through a government contract where a private company will take ownership of a product or service. A concern about privatization is that it removes the ability of the public to provide feedback. Healthcare is one of the examples in the U.S. and the concern was that many citizens were unable to afford basic care, and the costs of surgeries have skyrocketed.

Deregulation: The motive behind deregulation is to give industries more power to build the economy and reduce the cost of government subsidies and ultimately give consumers more benefits through competitive pricing and better quality products and services. Examples of deregulation in the U.S. include airlines, trucking, natural gas and banking in the 1970s. The deregulation of the airline industry saw customer-centric operations, increased flight frequency, quality of food, and cabin-crew service. Deregulation occurs in one of three ways. First, Congress can vote to repeal a law. Second, an agency can remove the regulation under an Executive Order. Third, the agency can simply stop enforcing the regulation. Deregulation allows more innovation from small, niche players, and allows the free market to set prices. Consumer groups also prompt deregulation pointing out how crazy industry leaders are with their regulatory authorities.

Rahul Sunny answered 9 months ago
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