Role of Government
Antitrust LegislationTrusts- legally formed combinations of corporations
The Sherman AntiTrustFirst significant law against monopoliesSet broad foundations for maintaining competition
The Clayton Anti Trust ActGave the government greater power against monopoliesThe act outlawed price discrimination- charging different prices for different people.
Robinson-Patman ActStrengthened the Clayton Act
Federal Regulatory Agencies
The Federal Trade Commission ActGave the government the power of cease and desist orders.
Cease and desist Order- an FTC ruling requiring a company to stop an unfair business practice, such as price fixing
FDAFood and Drug Administration- enforces purity, labeling, and effectiveness of foods, drugs, and cosmetics
FTCFederal Trade Commission- enforces antitrust laws, price fixing, unfair competition
FCCFederal Communications Commission – regulates radio, television, telephone and telegraph rates and services
SECSecurities and Exchange Commission- regulates and supervises the sale of securities (stocks)
NLRBNational Labor Relations Board- supervises federal labor relation laws
FAAFederal Aviation Administration- supervises the airline industry
EEOCEqual Employment Opportunity Commission- investigates charges of discrimination by employers and unions
EPAEnvironmental Protection Agency- protects the environment
OSHAOccupational Safety and Health Administration- investigates accidents at the workplace, enforces safety laws
CPSCConsumer Product Safety Commission- developed standards of safety for consumer goods.
NRCNuclear Regulatory Commission- regulates the use of civilian use of nuclear materials
FERCFederal Energy Regulatory Commission- supervises the energy industry
Internalizing Externalities Government uses the tax system to lessen
negative externalities in the economy.
Example- Government taxes polluters, gives tax relief to companies that clean the environment.
Public DisclosuresGovernment forces companies to reveal information to the public
Indirect Disclosures Government works indirectly to improve the quality of information