Economics is the social science that studies economic activity in a situation, when people or companies have to choose on allocation score resources to satisfy their unlimited wants. They choose the best option so the different one must be rejected. The value of the next best alternative is called the opportunity cost. It increases when company has to produce less of one goods, because produces more of the other. This is connected with production possibilities.
Some of the most important terms in economic are the demand and the supply. Thinking of demand, one should distinguish between quality demanded, which is the amount of a product that people want to buy and the demand that is a relationship between the price of a good and the quality demanded. The demand can be shown as a table of numbers (it is called a demand schedule) or as a graph, which is called a demand curve. The law of the demand says that people want to buy less of a good when its price goes up.It is important to remember that this law works only the ‘ceteris paribus’ condition. It means that the other variables, except the price, don’t change. Changes in other variables lead to a shift in the demand and a demand curve shifts. Two of the most important of variables are costumers’ incomes or a price of a substitute.
It is clear that when the incomes increase, people can buy more things, so the demand for them increases. This kind of goods are called normal goods. Inferior goods decrease when consumers’ incomes increase, because they can buy better and more expensive goods.
If the price of a substitute good becomes lower, a consumer could choose and buy it, because it becomes more attractive considering the price. A complement is a good which can’t be use without the other good. If the price of a complement goes up, demand for the good decreases and conversely.
The supply is the relationship between the price of a good and the amount of that good, which company want to sell. The second one is called a quantity supplied. The supply can be shown like the demand. Law of supply shows that if the price goes up, the more companies are willing to produce more good. Obviously, it is important to remember the ceteris paribus condition.
The most important variables, except the price, which can shift the supply are government taxes, subsidies and regulations, the number of firms in the market.
Product becomes less attractive for consumers when the price of it is high. One of the factors increasing costs of the production are taxes, that are imposed by the government. Taxes decrease supply of goods. Subsidies have the opposite impact-they increase supply, because they reduce costs of the production.
The second of variables, that I would like to describe is the number of firms in the market. The supply is the amount that all producers together want to sell at different prices, so if the number of suppliers increases, a total amount offered for sale also increases and conversely.
To sum up, the demand curve shows how many consumers want to buy something at different prices, and the supply curve describes how much firms want to sell at different prices. It is believed that when consumers and producers get together, they achieve the equilibrium. It means that the quantity supplied and demanded are in a balance. On the graphs, we can find the equilibrium by finding where the supply curve and the demand curve cross. If a market is in equilibrium and a few of variables act on the supply and the demand then the curves of them shift.
A shortage of a good takes place when consumers want to buy more of a good than producers want to sell.
A surplus of a good occurs when producers want to sell more units of the good than consumers want to buy at a current price.

Antitrust Policy and Regulation
The Antitrust Policy are operations, that aims are the promotion of competition among firms and a fight with attempts to monopolize. The first antitrust law was the Sherman Antitrust Act. It has two main sections. The first one focuses on agreements among firms. Section 2 shows that it is illegal for firms to make a market domination. Having a dominant share and charging a high price was not enough; the alleged monopolist has to harm other firms. The alternative to the rule of reason is known as the per se rule, which says that contrary to the law takes place when firm act the forbidden action, regardless of the circumstances. The Supreme Court applied a per se rule to the price fixing under Section 1 of the Sherman Act. Price fixing takes place when firms get together and establish the price of a product or a service, rather than allowing it to be determined naturally through free-market forces.
As I mentioned earlier, the Sherman Act makes it illegal for firms that attempt to make a market domination too. Therefore, firms often accuse their rivals that they harm other firms on the market or a firm engaged in predatory pricing. The second one occurs when a firm sells a good or a service at a price below cost  (or very cheaply) with the intention of forcing rival firms out of business.
Other forbidden act is conjunction of firms, because this act can damage competition.
One measure of concentration in the market power is the Herfindahl-Hirschman index (HHI). It is calculated by taking the market shares of the different firms in the market, squaring them and adding up the squared shares. By controlling that index, the Federal Trade Commision and the Antitrust Division of the Justice can prevent a merger in the market. Two kinds of mergers have been distinguished: horizontal, which are mergers between firms that sell the same product and compete with each other for customers, and vertical. The second one are mergers between a firm and one of its suppliers or customers. Economists believe that restraints may be beneficial to consumers.
The aim of the antitrust policy is to make markets more competitive. It can make higher costs, because the society isn’t taking advantage of all the economies of scale available. On the other hand, to produce as cheaply as possible means having only one firm, but then that firm will be a monopoly.
Producers can avoid this problem in two ways. Firstly, there can be only one firm, which is owned and operated by the government. The second one is based on a price regulation by government, but the firm is private and I will focus on the latter.
The government would have to require a firm to sell at a price equal to its marginal cost in order to achieve a regulated natural monopolist to produce the efficient quality. This way is called marginal cost pricing. It means that firm loses money on each unit sold.
In order to solve this problem, the regulator may choose to require the firm to sell at a price equal to its average total cost. Average total cost pricing is that regulators impose on certain businesses to limit the price they are able to charge consumers for its products/services equal to the costs necessary to create the product/service.
The next one method of a regulation is an incentive regulation. The firm is told at which price it will sell a good. It can make a profit by keeping its costs below that price, and it will lose money if it allows costs to rise above that price.
The regulated capture is an example of how policy can fail. Its regulators allow firms to charge high prices. The regulated firms can has an influence on regulator’s decisions.
During the last 20 years we can observe the deregulation movement.
To sum up, government regulation is the alternative to the market. Do not forget that it happens the market is better that alternative of government. It is necessary to be careful in weighing costs and benefits.