ABSTRACT
Industrial legislation relating to restrictive practices and monopoly power exists in all the major Western industrialised economies. How should governments attempt to regulate industry? From an economic viewpoint there would appear to be a case for attempting to achieve both efficiency and equity through the legislative framework. However, firms claim they can only achieve their minimum efficient size (MES – see Chapter 4) if they are allowed a substantial share of the market which would conflict with equity considerations. Equity requires competition amongst many firms making only normal profits. This poses a problem for regulators as to whether to go for efficiency or equity.
