Question

1. Describe the effects of regulation and deregulation.
2. Find an interesting case, story, or factoids which best illustrate the lesson(s) of this chapter.
3. Provide an argument for the breaking up of large social-media companies like Google, Facebook, and Amazon.
4. Provide an argument against the break-up of large social-media companies like Google, Facebook, and Amazon.

Answer 1

Deregulation implemented to reduce and redistribute the rent for the leading economic players to adjust with the new regulation. This deregulation is more beneficial having strong distribution and dynamic effects. The regulations will create a direct positive impact like standardising the rules across jurisdictions. The regulation depends upon several factors like; motivation for regulation, nature of regulatory instruments and structure of the regulatory process, economic characteristic of the industry and legal and political environment. The deregulation policies helped to reduce the tough competition in the market, more efficiency, lower costs and lower prices for the consumers. For attaining this several countries create oligopolies through mergers and acquisitions.
One of the best example for these regulation and deregulation policies is the merging of state banks with State Bank of India. This mainly focused to reduce the competition between the state banks and this merging make the bank function more efficiently.
One of the advantage of breaking up of social media companies is the breaking of the barriers attract more customers and investors to this company and also increase the innovation policies within each of the company. It increased the customer’s choice also. The free market monopoly over each company gets the right to set their prices within the framework. On the other hand the disadvantage occurred through this is increasing the government assistance for the further development of these individual companies. The functioning of individual companies creates undeserveable demand among the rural and unprofitable population.