competition and regulation

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Assignment task:

 

The mining industry has been a major driver of economic growth in Australia in the recent decade and currently accounts for 5 per cent of Australia’s GDP. On July 1, 2012 Australia introduced the Minerals Resource Rent Tax (MRRT), which is a tax on profits generated from mining of iron ore and coal. The tax of 30%, levied on the “super profits” from the mining, is to be payed by any mining company with annual profits of $75 million or above. Given the decline in iron ore prices and a slowdown of Chinese economy, what would be the impact of MRRT on the Australian iron ore industry? In your answer, please comment on the structure of the industry, the type of regulation used, factors affecting the industry and state your opinion. Make sure to use relevant diagrams

 

Note: Use relevant concepts and theories from weeks 1-9 to address a contemporary economic policy issue, currently debated in your country.

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