Various Ways Government Interacts with the Economy Essay

Various Ways Government Interacts with the Economy - Essay Example To safeguard this, the government has prohibited the following activities: This is an agreement between two or more competitors in form of price fixing and market allocation, and involves an agreement in which one party of a group of bidders will be designated to win the bid. For example government construction contracts being determined by bid. This type of conspiracy is termed to be illegal therefore it is prohibited by the government. This is an agreement between the competitors selling the same product or services to fix, peg, discount or stabilize prices. This pushes the price of the product high hence the businesses make huge profit after exploiting the consumers. In the United States, price fixing is prosecuted under section 1 of the Sherman Act as a criminal felony offence. (APA, 2000) This is lack of compatibility between different systems and is often used in computer industry. This is whereby the different companies create different versions of the same systems that cannot inter-operate therefore forcing the consumer to purchase the spare parts from the same manufacturer only. (Arthur, 1989) This is the practice of making the sale of one good to the de facto or de jure customer conditional on the purchase of a second distinctive good. Selling printers below cost or at a loss and recovering the amount on the sale of cartilages.