Airline Deregulation

The definition according to Patterson of economy is “ a system of production and consumption of goods and services that are allocated through an exchange ”(Patterson.2013,p.384). The economy is then driven by the consumers demand for certain products and services. As the consumer demand increases for the products or services provided many providers attempt to reduce use of resources in an attempt to keep prices low and attractive consumers. This is known as economic efficiency which is a firm’s attempt to fulfill as many of society’s needs using the fewest amount of resources as possible(patterson,2013,p. 385). The economy of the United States(US) is based primarily upon the decisions made by free-market business owners everywhere that affect …show more content…
So to relieve the burdens placed upon companies through regulatory actions a more concentrated action was taken through deregulation. Deregulation is the rescinding of excessive government regulation to improve the economic efficiency(Patterson,2013,p.387). Many years prior to the legislation of 1995 an effort to began to deregulate of some industries such as when Congress in 1977 passed the “The Airline Deregulation Act” , which allowed the airlines to set their own ticket prices rather than having them set by a government agency and eliminate service to smaller cities as previously required per the federal regulation. These changes were successful in establishing an increase in competition for routes to major-cities and lowering …show more content…
All of these affect the prices we as consumers pay for products and services that we use throughout our day while at home and work. The government tries to control cost of products and services through with regulations that are intended to promote not only competition between businesses to lower prices, but also keep business owners honest by reducing the risk of injury or illness to the consumer. There are times though that these regulations cause excessive increased prices for services or products so then the government reduces regulations through deregulation in order to increase competition and lower prices. This deregulation can sometimes have negative effects on the economy due the unethical practices of certain companies which cause severe consequences for the nation’s economy and not just their own business. Regardless of whether you believe government intervention is good or bad in the business world in reality it must be present to try and keep services and products accessible to everyone and not just a limited