In the system of national public administration, the practices of regulating economic processes in general and prices in particular are approved. Consumers are also "in favour of" such actions by the state, as they associate them with consumer support. Government Resolution №341 of 22.04.2020 “On Measures to Stabilize Prices for Goods…” introduced state regulation of prices by declaring changes in retail prices for goods of “social significance”. This list contains goods where markets are different in their competitive nature, so it is not possible to regulate them by the same method. The necessity of price regulation measures, even for a limited list of goods, is the subject of this article.
In case of perfect competition, firms that produce, for example, buckwheat, granulated sugar, wheat flour accept the market price, hence government regulation will lead to a deficit / surplus. Activities of producers of pasta of domestic production (vermicelli from premium wheat flour), pasteurized milk with fat content of 2.5 percent (in the film), rye-wheat bread, belong to the monopolistic competition. Typically, their activities are self-sustaining (break-even), hence administrative price decrease will lead to a reduction in production with all associated consequences. Markets of chicken eggs of category C1, poultry (chicken carcass), still mineral water, butter with fat content of 72.5 percent, in microeconomics are "oligopolies", which suggests interdependence in pricing. Therefore, producers themselves "disapprove" state intervention that violates competitive conditions. Natural gas and electricity markets are monopolized. The tool to reduce prices is to expand the number of market operators. To this end, an alternative to state regulation of prices is further development of a competitive environment and entrepreneurship
Generation Capacity Investments in Electricity Markets: Perfect Competition
