Acta Univ. Agric. Silvic. Mendelianae Brun. 2016, 64(6), 2039-2046 | DOI: 10.11118/actaun201664062039

Legal Regulations of Production Plans: Are They Unproductive?

Marek Litzman, Martin Machay
Department of Economics, Faculty of Business and Economics, Mendel University in Brno, Zemģdģlskį 1, 613 00 Brno, Czech Republic

Legal system forces every economic agent operating on the market to fulfil some amount of duties and it alternates their decision making. This regulation moves the equilibria of each individual subject including firms, which have to adjust their production plans in a way prescribed by the law. We develop a theoretical background of production under the legal regulation and compare alternate equilibria with different degrees of legal regulation, which is described as unproductive in economic literature. The model shows that regulated production plans and all used inputs are still productive but the level of satisfaction within the society is decreased.

Keywords: unproductive activities, utility, regulation, law, production plans
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This article is an output of IGA PEF MENDELU DP 2016009.

Prepublished online: December 21, 2016; Published: January 1, 2017  Show citation

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Litzman, M., & Machay, M. (2016). Legal Regulations of Production Plans: Are They Unproductive? Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 64(6), 2039-2046. doi: 10.11118/actaun201664062039
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