The arguments for and against the deregulation of markets
Deregulation means removing government rules from a market. It can boost competition and lower prices, but it can also allow firms to cause harm that the rules were designed to prevent.
Real World
Deregulation of the US airline industry in 1978 removed government control over routes and fares; new entrants like Southwest Airlines drove average ticket prices down by roughly 40% over the following decade.
Exam Focus
Avoid stating deregulation 'always increases competition' — link it to barriers to entry and contestability theory to access higher mark bands.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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