EGT1 – Task 309.1.3
EGT1 Task 309.1.3
Government regulation in business today is vital because it attempts to create a level playing field for companies competing against one another and regulate honest business practices toward the consumers. It is important to for any business to understand how government regulation affects their industry and how they intend to run their company.
Industrial regulation is the government regulation of an entire industry. The purpose of industry regulation is for a an entity to watch an industry’s prices and products to make sure that they do not create a monopoly or take advantage of consumers. There are basically two kinds of regulation, price regulation and social regulation. Price regulation is regulation directed towards industries that have tendencies that may produce a monopoly. The industries that price regulation agencies monitor are: the Federal Energy Regulatory Commission (FERC), which are basically responsible for monitoring gas and oil pipelines and other energy based industries; the Federal Communications Commission (FCC), who are supposed to regulate television, telephones, and other areas of communication; and the Securities and Exchange Commission (SEC), who regulates financial markets. Social regulation monitors the conditions where goods and services are produced, the safety of those items produced, as well how the production of those good might affect society. The industries that social regulation agencies are worried about are: the Food and Drug Administration (FDA), Environmental Protection Agency (EPA), and the Equal Employment Opportunity Commission (EEOC). The main purpose behind these organizations is; to stop monopolies from being formed and to control the pricing of the products or services because these industries have elements that may potentially create a monopoly. The affect ...