What are the major types of government regulation of business?
Explain the reasons for regulation.
The major types of government regulations are economic and social. Economic regulations protect the consumer by stabilizing pricing, forbidding price fixing or collusion, and protecting free trade. Social regulations protect the interest of the public in regards to health, safety, and the environment. The amount and type of regulation depends in large part upon the industry a business is in.
Economic regulations work to modify the normal workings of the free market. These regulations include regulation of prices and wages. For instance, the federal government regulates the price of milk. Other regulations include allocating public resources and setting service territories. The Federal Trade Commission allows local telephone companies to offer long-distance service as long as other service providers are also allowed to compete on long distance service. Anti-trust …