[SOLUTION] Perfect Competition

Some professions, such as haircutting or hair braiding, are fairly close to perfectly competitive.These professions sometimes succeed in getting the government to establish licensing requirements that deter some competitors from entering the profession. Why might these professions want to impose such licensing requirements?On the other hand, in some states, governors or legislatures have attempted to deregulate some occupations or halt efforts to license new ones. One example: In Texas, new Republican Gov. Greg Abbott has made occupational licensing one of his targets. He has proposed repealing a number of licenses, including those for dog trainers, interior designers and cosmetologists. He’d like to abolish criminal penalties for people who don’t comply with licensing requirements, except when public health and safety is at risk.Why might the governments choose or not choose to impose such requirements? Use the concepts from Chapter 12 Firms in Perfectly Competitive Markets to explain why these professions might want to impose such licensing requirements and why the governments might choose or not choose to impose such licensing requirements? Your explanations should consider why these professions might want to impose such licensing requirements, why the governments might choose or not choose to impose such requirements and what type of implications this decision may have in terms of competition and free market, inequality issues, pricing and impacts on consumers.You are expected to do some reading before posting to this forum about perfectly competitive markets and impacts of licensing rules in particularPlease do not answer based on your guess, your answers should be based on research/info and related economic concepts.Minimum 200 words.

 

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