Final answer:
Canadian competition policy focuses on eliminating allocative inefficiency, lowering barriers to entry, and regulating through monopoly and antitrust policy to ensure companies operate in a way that benefits all of society, not just their own profits.
Step-by-step explanation:
A major aim of Canadian competition policy is to eliminate allocative inefficiency and the problems it causes in the market. Allocative efficiency is about producing the optimal quantity of a product, ensuring that the marginal benefit to society matches the marginal cost. When businesses act to maximize their profits without considering the overall benefit to consumers, this balance can be disrupted, leading to inefficiencies in the market.
Moreover, competition policies in Canada seek to minimize barriers to entry which can prevent new competitors from entering the market. Barriers can include legal restrictions, technological requirements, or strong market control by established companies. By reducing these barriers, a more dynamic and competitive market can emerge, benefiting consumers with more choices and potentially lower prices.
The concept of monopoly and antitrust policy is pertinent, as it involves the careful regulation of companies to prevent practices that may hinder competition or exploit consumers. This regulation aims to ensure that companies cannot simply focus on their own profits at the expense of societal welfare.