Contents1 Introduction22 Literature Review23 Methodology34 Analysis
Contents
1. Introduction 2
2. Literature review 2
3. Methodology 3
4. Analysis of Data 4
5. Analysis of Results 7
6. Conclusion 8
7. Reference list 9
1. Introduction
In economics the law of demand and supply states that markets will always clear at equilibrium price, this is where the demand curve and supply curve intersect. However this law, especially in monopolies, can be deeply inefficient in a sense that too much or too little of a certain product a produced or pricing is too high that it prices people who need these products out of the market. Therefore governments through legislation, subsidies, taxes and tariffs intervene in the market to limit these inefficiencies and in turn protect consumers and producers.
The purpose of this report is to analyse, through real life examples and data, whether government can successfully intervene with the law of demand and supply. A focus will be put on the South African market for electricity, which is a monopoly run by Eskom.
2. Literature review
Karagiannis, Nikolaos (2001). "KEY ECONOMIC AND POLITICO-INSTITUTIONAL ELEMENTS OF MODERN INTERVENTIONISM." Karagiannis and other advocates of free market economics generally view government interventions as harmful, due to the law of unintended consequences, belief in government's inability to effectively manage economic concerns, and other considerations. Government officials tend to be naturally disposed to seek more power and authority, and the money that usually goes with those things, and this quest often takes the form of economic interventionism which they then seek to justify. Many modern liberals in the United States and contemporary social democrats in Europe are inclined to support interventionism, seeing state economic interventions as an important means of achieving wealth redistribution or to promote social welfare. von Mises, Ludwig (Ed.1998). INTERVENTIONISM: AN ECONOMIC ANALYSIS
Von Mises, Ludwig and conservatives also frequently support economic
1. Introduction 2
2. Literature review 2
3. Methodology 3
4. Analysis of Data 4
5. Analysis of Results 7
6. Conclusion 8
7. Reference list 9
1. Introduction
In economics the law of demand and supply states that markets will always clear at equilibrium price, this is where the demand curve and supply curve intersect. However this law, especially in monopolies, can be deeply inefficient in a sense that too much or too little of a certain product a produced or pricing is too high that it prices people who need these products out of the market. Therefore governments through legislation, subsidies, taxes and tariffs intervene in the market to limit these inefficiencies and in turn protect consumers and producers.
The purpose of this report is to analyse, through real life examples and data, whether government can successfully intervene with the law of demand and supply. A focus will be put on the South African market for electricity, which is a monopoly run by Eskom.
2. Literature review
Karagiannis, Nikolaos (2001). "KEY ECONOMIC AND POLITICO-INSTITUTIONAL ELEMENTS OF MODERN INTERVENTIONISM." Karagiannis and other advocates of free market economics generally view government interventions as harmful, due to the law of unintended consequences, belief in government's inability to effectively manage economic concerns, and other considerations. Government officials tend to be naturally disposed to seek more power and authority, and the money that usually goes with those things, and this quest often takes the form of economic interventionism which they then seek to justify. Many modern liberals in the United States and contemporary social democrats in Europe are inclined to support interventionism, seeing state economic interventions as an important means of achieving wealth redistribution or to promote social welfare. von Mises, Ludwig (Ed.1998). INTERVENTIONISM: AN ECONOMIC ANALYSIS
Von Mises, Ludwig and conservatives also frequently support economic