AIEEE Questions

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The Interstate Commerce Act of 1887 is a United States federal law that was designed to regulate the railroad industry, particularly its monopolistic practices.

The reason that the Interstate Commerce Act required that rates be published was to avoid secret rebates and similar deals. Until then, big shippers would demand rebates from railroads, which would in effect reduce their shipping costs without letting competitors know. This is anti-competitive.

Hence, the Act required that railroad rates be "reasonable and just," but did not empower the government to fix specific rates.

The raise in the price of a product may be due to increase in cost of production, increase in the demand of the product and increase in the margin.

When the price of a product increases its demand may fall as per the Law of Demand and an increase in the competition.