Magernial Economics
Expansion and Merger
Dr. Elkanah Faux
Managerial Economics & Globali ECO 550
February 26, 2012
Explain why government regulation is needed, citing the major reasons for government involvement in a market economy.
If we look into the history of the movie industry we will find that the government intervened in the 1940’s in the movie industry. With that intervention it changed the way movies were produced in some critics’ opinion for the worst. Critics will tell you that the quality and content of movies have plummeted when the movie industry is compared with the Golden Age and the way it is today. Producers realized that in order to really make the business as a whole more profitable, that they needed to be able to own and be in charge of the whole production process themselves. (www.mises.org) Over the years the movie industry has changed in the way the American culture has changed. In the beginning movies were wholesome, showing the dynamics of the family just to provide entertainment for families. Overtime the industry started to incorporate sex, violence, and cultural differences just to be able to keep the public interested in the movies that were produced. (www.mises.org) In the beginning the movie industry used virtual integration to maintain quality, keep the competition at bay and to also stabilize profits. This is when the Justice Department became involved, because then they created the Sherman Antitrust Act. What that basically means that it prohibits business activities that limits competition in the marketplace. Even though the Sherman Act was to help the industry at the time to still is competitive so that everyone in the industry would be able to benefit. (www.mises.org) Every since the movie industry was created it has been steady evolving. For example movies that were made in the 1930’s are more favored than those that were created in the 1950’s. The reason why is because in the 1030’s is when the classics. “The Wizard of
Dr. Elkanah Faux
Managerial Economics & Globali ECO 550
February 26, 2012
Explain why government regulation is needed, citing the major reasons for government involvement in a market economy.
If we look into the history of the movie industry we will find that the government intervened in the 1940’s in the movie industry. With that intervention it changed the way movies were produced in some critics’ opinion for the worst. Critics will tell you that the quality and content of movies have plummeted when the movie industry is compared with the Golden Age and the way it is today. Producers realized that in order to really make the business as a whole more profitable, that they needed to be able to own and be in charge of the whole production process themselves. (www.mises.org) Over the years the movie industry has changed in the way the American culture has changed. In the beginning movies were wholesome, showing the dynamics of the family just to provide entertainment for families. Overtime the industry started to incorporate sex, violence, and cultural differences just to be able to keep the public interested in the movies that were produced. (www.mises.org) In the beginning the movie industry used virtual integration to maintain quality, keep the competition at bay and to also stabilize profits. This is when the Justice Department became involved, because then they created the Sherman Antitrust Act. What that basically means that it prohibits business activities that limits competition in the marketplace. Even though the Sherman Act was to help the industry at the time to still is competitive so that everyone in the industry would be able to benefit. (www.mises.org) Every since the movie industry was created it has been steady evolving. For example movies that were made in the 1930’s are more favored than those that were created in the 1950’s. The reason why is because in the 1030’s is when the classics. “The Wizard of
References: The Agency Problem and Control of the Corporation. Retrieved from www.highered. mcgraw-hill.com Evaluating a Company’s Management. Retrieved form (www.investopedia.com) Government In a Market Economy. Retrieved from http: //usinfo.org/trade How Antirust Ruined the Movies. Retrieved from http://mises.org North, Douglas (1990). Institutions, Institutional Change, and Economic Performance. Cambridge University Press Objective of the Firm. Retrieved from http://oz.plymouth.edu