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Governmental regulation of the marketplace

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Should government create conditions of pure competition for all business? In your answer consider water companies, restaurants, and airlines.

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For certain industries pure competiton is not rational. This is often true when the industry requires a large upfront investment, so the additional cost to serve an addition customer is neglible in comparison. Thus a company already established will be able to give customers a much better price than one that is trying to recoop the loss of the intitial investment. Water companies are a good example of this.

Furthermore "economy of scale" ...

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Considerations related to governmental regulation of the marketplace

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Take and explain your side on the debate over regulation or deregulation of the airline industry.

1. What is or is not working about deregulation?
2. What are some major arguments for or against deregulation?
3. What effect is deregulation having on the industry's level of competition?
4. What do you see is the future with respect to deregulation (more or less)? What impact will that have on the industry?

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