Industrial Organization and Regulation of the Market

A grocery could be described in simple words as a place where buyers and shell outers meet to exchange goods and/or services. In this context the foodstuff does not have to take a physical location. This has been made workable by advances in technology where its instantly possible to sell/by goods and or services oer the telephone or through and through the internet.There be different types of markets and these markets argon determined by m all factors. In general we have two broad categories of markets these are the industrial markets and consumer markets.Consumer MarketsConsumer markets are the markets for products and services bought by individuals for their own or family or domestic exercising. Goods bought in consumer markets fag be categorised in several ways Fast-moving consumer goods (FMCGs) Consumer consumer durables Soft goods Services (e.g. hairdressing, dentists, childcare)Industrial MarketsIndustrial markets involve the sale of goods between businesses. These are goods that are not aimed directly at consumers. Industrial markets admit Selling undone goods Selling raw materials or components Selling services to businessesIndustrial markets often supplicate a slightly different marketing strategy and mixOrganization and RegulationIn every kind of market situation mistakes just like in the public sector can and do occur. When political sympathiess fail we c every(prenominal) it government failure but when markets fail we call it market failure. Of course, most deviations from the prototype are minor and do not impose significant cost on society. But when deviations are significant there is often a call for government to do something about the problem. For example, markets can deviate significantly from the competitive ideal e.g., firms may acquire significant market power, set about deceptive practices or collude like cartels in order to get out abnormal profits.When it comes to chancer and organization of markets there are usually a few goals that every manufacturing and or government wants to achieve. These include consumer security measures (from sub-standard or harmful products), price controls (to prevent over exploitation of consumers and insalubrious competition), prevent counterfeiting and black market trading. In sum total thus regulation involves administrative guidance of the market in order to make it lots efficient.By efficiency we mean Economic efficiency and Economic efficiency is something much more than producing goods at the lowest possible cost. It involves providing individuals with the goods and services they desire, in the quantities, qualities, places, and quantify they desire them, with the least use of societys scarce resources. Economists argue that if markets are competitive, if entire in bodation is forthcoming, if resources are mobile, and if individuals engaging in the transactions bear the integral be and receive the full benefits of their transactions, economic efficien cy forget be achieved.Regulation can both be internal or external. Internal regulation usually involves regulation within the industry especially in the surface area of competition. External regulation involves control through government policies.External regulation includes tender Regulation.This involves government regulation to contain negative externalities. Environmental problems, like befoulment and over-crowding, are hard to solve1. Due to this governments come up with measures to control this, these measures include Rights to pollute and accountabilitys to use highways.Rights to PolluteCreating in effect(p)s to pollute the air can paradoxically serve well to control pollution. A right(a)-to-pollute final result for pollution control defines a right to pollute and allows that right to be bought and sold. In essence these rights are expressage this makes their prices high. In order to avoid paying these huge amounts firms instead arrange pollution abatement equipme nts and these help reduce overall pollution.This means that the take aim of allowable pollution can be undertake, as we now do for instance to limit sulphur dioxide emissions in the United States to combat window pane rain.2 Once pollution rights are defined and a given put out is established, a market price can be determined. Then those who can reduce pollution most efficiently, that is, for less than the value of a right to pollute, leave alone reduce pollution and sell their rights to pollute to otherwises. Those who face high pollution abatement costs can buy the pollution rights and use them for permission to emit pollution.Thus, at market equilibrium, the price of pollution rights reflects the fringy cost of controlling pollution to the level that the available pollution rights will allow.Rights to Highway UseWe pay no price for highway use. We incur the privy cost of a vehicle gaffe between two points, including not only fuel, oil, tire wear, and so on, but also the drivers (and passengers) time, and when congestion is adept that time component goes up.3 The familiar problem of spendthrift traffic congestion arises because each of us decides whether to make a highway trip on the basis of the average cost rather than the marginal cost of the trip to society.4 An additional car can join a stream of cars on the highway and it will share in the average costs and delays of all the other cars. Yet that marginal vehicle causes delays to all the others, delays that the driver of the marginal vehicle does not take into account when joining the traffic stream.A solution to the highway congestion problem can come from assigning a property right in road use a right to delay others, like the right to pollute. Electronic devices exist now that will record time spent on a road. When placed in vehicles, these devices function like the electricity meter in your house, but they spot the time and location of your road use5. Technology and economics combine i n these devices to make billing drivers for road use feasible, and that can avoid excessive congestion.Such devices and fees are in effective use in Singapore6 and many of us should expect to see them in our lifetimes. There are many other areas where social regulationWas introduced in clumsy forms consumer protection for example that are alter gradually, based on economicIdeas that improve information and market function.Economic regulation.Economic regulation in many markets has taken a form whereby the number of firms in an industry is determined by the government and the markets firms can serve are specified by the regulatory commission. Prices and rates of return are regulated and, importantly, entering into the industry is either forbidden or made very hard-fought by law. Thus economic regulation maybe in the form of antitrust laws or price fixation. In antitrust cases, courts follow either per se rules, under which certain facts determine guilt or innocence, or they exam ine circumstances more broadly and follow a rule of reason analysis, to determine the appropriateness of the observed behaviour.The per se procedure is faster and easier, and of course it gives more precise guidelines to business firms, but it requires what lawyers call impudent line, or clear, rules. The disadvantage of such per se rules is that they may be over or under inclusive. The alternative, rule-of-reason, analysis allows courts to examine the circumstances of each case. It is in these rule of reason analyses that economics is applied far better now than in the past.Limitations of regulationRegulation leads to increased costs of conducting business. The direct and confirmative costs of regulation result in higher(prenominal) prices and increased costs of employing workers. These costs act as a tax on reflect creation and employment. They also cause a decrease in productivity. The higher business costs that result from regulation are passed along to consumers in the form of higher prices (indirect taxation). To the extent that lower income individuals spend a greater proportion of their income on the goods and services affected, the higher prices are in essence a form of regressive taxation.7ConclusionThe organization and or regulation of any market has its ups and down. Markets and governments always fail from time to time. Due to this a harmonic relation needs to exist between the government and industries. This requires that where regulation leads to increased.ReferenceEllerman, A. Denny, et al. (2000) Markets for slap-up air The U.S. acid rain program, Cambridge University Press, Cambridge.Mills, David E. 1981. Ownership arrangements and congestion-prone facilities. American Economic revue 71 493-502.Phang, Sock-Young, and Mukul G. Asher. 1997. Recent developments in Singapores beat back vehicle policies. Journal of conveyance Economics and Policy 31 205-25.Roger Sherman, The Future of Market Regulation available a www.seapres.wp8.htm.Sher man, Roger. 1967. A private willpower bias in pass over choice. American Economic Review 57 1211-17.Sherman, Roger. 1971. Congestion interdependence and urban transit fares. Econometrica 39 565-76.Theriault III, Rene J. 1999. The congestion crisis An valuation of traffic and congestion remedies for the Washington, DC metropolitan area. Undergraduate thesis, University of Virginia.1 Roger Sherman, The Future of Market Regulation available awww.seapres.wp8.htm2 Ellerman, A. Denny, et al. 2000. Markets for clean air The U.S. acid rain program, Cambridge Cambridge UniversityPress. 3 Sherman, Roger. 1967. A private ownership bias in transit choice. American Economic Review 57 1211-17. 4 Mills, David E. 1981. Ownership arrangements and congestion-prone facilities. American Economic Review 71 493-502. 5 Theriault III, Rene J. 1999. The congestion crisis An evaluation of traffic and congestion remedies for the Washington,DC metropolitan area. Undergraduate thesis, University of Virginia. 6 Phang, Sock-Young, and Mukul G. Asher. 1997. Recent developments in Singapores motor vehicle policies. Journal ofTransport Economics and Policy 31 205-25. 7 Web phrase available atwww.regulation.org