Question

Good and sound governmental pricing regulation which enables the producer to be alone, at the same time his pricing mechanism likes the perfect competition. Show how that would serve the society, discuss use drawing?

Answer 1

Good and sound government pricing regulation will enable the producer to be self sufficient and at the same time his pricing mechanism would favour the perfect competition as it will help in share price discovery as it is promoting the free entry and exit of various participant through perfect competition.

when there is a good and sound government pricing regulation, it will mean that the government is highly favourable to private enterprises in order to help them discover the adequate price which will protect the interest of customer and well as the interest of business organisation so they are adhering to such fair pricing mechanism that will support the perfect competition in the market through fair discovery of prices.

Fair price mechanism always advocate that fair price should be kept for the customers so, that the interest of both the parties which includes protection of the interest of customers and the interest of the business organisation. These practices encourage perfect competition, as when share prices are set by one organisation, it will encourage other organisation to set the similar price as it is a perfect competitive market and if it has to complete it will have to price its product in a similar range, so it will overall lead to a fair and reasonable price and higher demand in the overall economy, which will help in generation of overall output leading to the increase of gross domestic output in the country.

it will serve the society as it will protect the interest of the customer and when the business will be generating enough demand for their product, they will be generating a lot of employment which will ultimately serve the society interest