Market Mechanisms

8 Pages 2055 Words

well over $20.00. Anyways I can understand the price of the ticket going up due to inflation but not that high. When I was in Florida a movie ticket was $5.50 and $7.50 after 7pm and here it’s $6.50 only for the first screening, which no one wakes up for because it’s too early, except the old people. So I think that Hoyts is a monopoly and it has to be stopped by the government.
To help the consumer against monopolistic companies, the government will set up antitrust laws to prohibit mergers or acquisitions that would threaten competition. Also the U.S. Department of Justice and the Federal Trade Commission will regulate prices, advertising, and other company behavior that might put the consumer in an unfair disadvantage in product markets. Many regulating firms have been set up in order to ensure that monopolists don’t exploit the consumer, such as OFTEL(Office of Telecommunications), OFGEM(Combined Office of Gas & Electricity Regulation), OFWAT(Office of Water Regulation), and OFGAS( Office of Gas Regulation). Setting maximum price increases in such industries (communication, gas, water, electricity, etc) will encourage them to reduce costs in order to increase profit, thereby improving productive efficiency. But these companies argue that they need to increase prices in order to be able to sustain dynamic efficiency (further knowledge and research of the product). For example the water companies need t...