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Cases of law of demand supply and government intervention

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The US Postal Service is facing increased competition from firms providing overnight delivery of packages and letters. Additional competition has emerged because messages can be sent via computers. What will be the effect of this competition on the market demand for mail delivered by the post office? Substantiate your argument based on concepts related to law of demand and the law of supply.

Give two examples of actions taken by a company, government, or organization whose effect is to prevent specific markets from reaching equilibrium. What evidence of excess supply or excess demand can you cite in these examples?

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The general effect of this competition on th market demand for mail delivered by the post office, is a reduction of quantity demanded at all prices. If we assume that the increase in competition by other delivery firms and by the possibilty of sending documents via the internet doesn't change the amount of packages/documents that must be delivered, you have the same market size, but now split between various competitors and reduced by the use of the internet. ...

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The US Postal Service is facing increased competition from firms providing overnight delivery of packages and letters. Additional competition has emerged because messages can be sent via computers. What will be the effect of this competition on the market demand for mail delivered by the post office? Substantiate your argument based on concepts related to law of demand and the law of supply.

Give two examples of actions taken by a company, government, or organization whose effect is to prevent specific markets from reaching equilibrium. What evidence of excess supply or excess demand can you cite in these examples?

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Discussion Questions on Supply and Demand

1) Government intervenes in the free market by many different ways. For example, regulators may use price controls, impose taxes on consumers as well as on producers and give subsidies to producers. What would be the intended outcome in the market by each of the above government actions? Give a real-world example of how government intervention in the free market affects the demand for or supply of a product or service you use or a product or service produced at your workplace.

2) Under antitrust policies, the government breaks-up some dominant firms, prevents corporate mergers, and regulates some business practices that reduce competition. What are the major antitrust laws in the United States? Discusses several major antitrust cases in the United States. Discuss how the US economy will likely differ today if AT&T had not been broken-up. How do these laws affect (or affected) your work place or products used at your work place?

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