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Government Involvement Assignment, promoting a stable market, why are…
Government Involvement Assignment
what is a monoply? A monopoly is when a company or group has complete control over the supply of a product or service.
They cut out competition.
If a company has a monopoly they can set the price at what they want.
Less incentive to create a better quality product (no competition)
examples of a monoplies
De Beers Consolidated Mines once controlled a majority of the market for diamonds.
They gained control by pricing out their competitors and once they had control they could control the price of diamonds.
They had control on the supply of diamonds so they could create ‘artificial scarcity*’ to increase the demand and drive up the prices.
Ensuring the safety of the Consumer
Role of Health Canada
Health Canada sets safety regulations for companies that produce goods for human consumption.
They require companies to clearly display the nutritional value of a food on its packaging.
They require cigarette companies to clearly warn people of the potential harms.
Role of CSA
Companies like the Canadian Standards Association (CSA) and the Consumer Product Safety Commission (CPSC) ensure that products meet industry standards for safety.
These are examples of Crown Corporations (more on them later).
To be able to display the sticker, a product must undergo extensive stress tests and material science tests.
Product Recalls
If a product passes all safety tests it is usually trusted in the market, however, the government agencies responsible for consumer safety cannot oversee all production.
Sometimes, products slip through and enter the market that are not safe. If they do, the government can force the company to issue a recall on that product.
A recall allows the consumer to have their purchased good repaired for free or get a refund.
Some companies and businesses care more about profit than environmental sustainability, and if left to their own devices, they would pollute freely in the name of maximising profit.
Government agencies ensure that companies meet environmental protection standards
Environment and Climate Change Canada informs Canadians about protecting and conserving our natural heritage, and ensuring a clean, safe and sustainable environment for present and future generations.
The department regulates industry through acts such as the Canadian Environmental Protection Act, 1999 (CEPA 1999).
Labour Laws
What they are
Why they are important
They conduct workplace inspections.
They investigate workplace accidents and injury.
In Canada and in every province there are laws that protect worker and employer rights.
Governments enforce occupational health and safety standards.
CBC
Canada Post
VIA Rail
Bank of Canada
Crown corporations are wholly owned federal or provincial organizations that are structured like private or independent businesses.
Prevent Price Fixing
What is Price Fixing?
An example of this would be if shell, esso, and petro-canada agreed to increase their fuel prices by the same amount to make more profit.
The government can ensure companies cannot fix their prices to be askew from normal market forces (supply and demand).
This protects the consumer as it keeps prices for goods and services fair and affordable.
Price fixing prevention is enforced under the Competition Act which serves to promote competition and ensure the best prices for consumers.
Drawbacks of government involvement in the economy
Waste and Ineffeciencies
The government sounds pretty great so far!
They do a lot of good for the consumer right?
Unfortunately that is not always the case, and just like any human, they can be self-serving and corrupted.
Government Corruption
Governments wield a lot of power and are privy to information outside of the public sphere.
It is against the law for government officials to use private information to gain profit, this is called insider-trading.
Recently a group of US senators sold a significant part of their stock portfolio after a private briefing about the damage COVID-19 would do to the stock market.
promoting a stable market
why are monoplies are bad thing
environmental protection
why are they important
Example of environmental regulation on businesses
Crown Corporations
What are they and why they exist
examples of crown Corporations