Competition+Policy-+Tevan's+Eco+Task

== =COMPETITION POLICY=

Before I start, I should mention that this is the link to the Competition Policy Reform Act. 1995. The one on the Government's Site doesn't expand to give full detailed information, but this one does. Clicking on this link will open a new page. Competition Policy Reform Act. 1995 I suggest that you go to this website is you want more info and this one below. Australia's National Competition Policy: Its Evolution and Operation I will some questions on based competition policy for your benefit (Hopefully it will be detailed enough). (I believe each of these questions, for assessment are worth 5 marks each to total 20 Marks) I have also included (coming soon) a video for your viewing pleasure about this to also help. :) I hope by answering these questions, you will be better off and understand the reasons of Competition Policy

1) How does this microeconomic reform work? Okay, how does this competition policy work? Well, the general idea is to help the consumer not pay too much for a good or service for what it is worth (in this case, you should not pay bread for $10 when it is worth $2 [note though that should never ever happen in this lifetime). This can be achieved by lowering production cost for firms so that these companies can pass on the savings. To do this you must boost productivity in the workplace and expand the productive capacity of the economy by not lowering demand bu t enhancing and expanding supply. Of course expanding this Aggregate Supply will facilitate growth in Aggregate Demand without causing any inflation. The competition reform act 1995 clearly states that //'The object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and// //provision for consumer protection'// Senator Lionel Murphy, says that the purpose was //'to control restrictive trade practices and monopolies and to protect consumers from unfair commercial practices.'// As a personal opinion, I totally agree with that, it makes sense, no business should be no monopolies in any market (of course, we can name the Coles vs Woolies battle as being oligopoly- the extreme minimal line). Consumers want competition to be a Monopolistic Competition (not Monopoly), although Perfect Competition would be a bonus.

2) How does this reform help boost productivity at the workplace level? This reform will help boost productivity at the workplace level by helping businesses that have been singled out. You hope to have competition in virtually every single market, with the exception of markets that are Government owned such as the Postal Service. It is going to force companies to compete with other companies to fight for consumer demand. This competition may include other types of costs of production such as advertisements. It makes it a more business-like environment. Remembering companies will anything to sell their good +/or service to the product- as long as it is within their budget and they are willing and able to do so. A competitive environment allows companies to evolve and provide new innovative products to entice consumers, I honestly think this is a great thing. 3) How does this boost help contain inflationary pressures? This boost will help contain (slow down or stop temporarily) inflationary pressures because of the increase in Aggregate Supply. For example, for many years, there was only one business that took a stranglehold of the telecommunications industry- Telstra. Their monopoly was superbly strong and powerful, eventually the Telstra was privatised and it provided more competition. The maintenance of this strong competition will increase efficiency and this will represent and improvement in Supply conditions and leads to an increase in Aggregate Supply and contain inflationary pressures. As it is relatively cheap to make a phone call nowadays, businesses who use these services are going to lower their cost of production, prices and therefore going to drop and consumers are going to benefit lower prices from many different markets. The demand that is generated from these low prices isn't going to affect inflation as much due to the fact that the productivity is always being maintained and improved so that me ans the Aggregate Supply is always being checked. So basically you contain inflationary pressures, you either need to cull the demand or increase Aggregate Supply, Competition Policy, increases AS and therefore does not 'touch' demand. Well of course these businesses are now more willing and able to supply. The AS sustains the effect from AD and the economy is operating further away from Productive Capacity.

4) Are there any negatives associated with this reform? Of course, there are going to negatives to any policy. If prices are going to be low, of course companies are not going to achieve much profit at all. The lower prices are going to be unfavourable for companies, especially small businesses such as those who aren't franchised and operate as one single store like shops on Chapel Street, South Yarra etc. When Telstra was privatised Market share was lost to rivals such as Optus and emerging rivals such as Vodafone and Virgin Mobile. That made sense because there were more rivals and of course, more competition and the market was no longer a monopoly. This negative isn't really drastic or anything like that, but you need to lose some to gain some (money of course). So losing some market share meant that the consumer benefited more and the economy also benefited.

NOBODY LIKES A LOPSIDED CONTEST as we saw in rounds 19 and 20 of the AFL. There was no competition in Geelong beating Melbourne and Gold Coast by 186 and 150 respectively and Collingwood beating the lowly Port Adelaide by 136. However, this is not a sports page. You want firms and businesses fighting tooth and nail for your dollar, that is what it is all about and that is why the Government wanted the Competition Policy.

Now after you have now spent some of your time reading this lovely page on competition policy, you can sit back, relax and enjoy this video i have put up, i have created this with some of my 'magic' hahahaha. No, but seriously enjoy. I would liked to put a video from YouTube but, there is nothing useful, so that is disappointing... Nonetheless, here is a Super-Tmaster Corporations Video. The video is just a quick summary of what i have said (well i didn't really say this out loud but you were probably imagining me saying it though in class as if it was a talk [you may not be as well....???])

Also i did use these 2 sites [|http://www.australiancompetitionlaw.org/o] [|verview.html] Competition Policy (this is a separate link) for more help as well. The video is rate G. =media type="youtube" key="vnG2pSzCIbY" height="349" width="425"=