G2 EE UK air transport industry
- Created by: kgarrod
- Created on: 21-02-23 22:46
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- Plan
- market structure
- dominated by a few companies (oligopoly)
- high barriers to entry (expensive)
- Virgin, TUI, Easyjet & British airways
- collusion: discuss/ work together to negotiate price and quantity
- relatively price inelastic
- kink demand curve: not a straight line but has a different elasticity for higher and lower prices
- imperfect competition
- Virgin, TUI, Easyjet & British airways
- dominated by a few companies (oligopoly)
- Economic implications
- government intervention= more competition= greater efficiency & price war
- unilateral deregulation= gains go abroad
- BREXIT
- short staffed, inefficiency & lower wages
- EU had unregulated 'open skies' & abandoned various price restrictions
- HSR substitute
- government intervention= more competition= greater efficiency & price war
- Approach if you were the Gov
- pollution permits: lead to emerging self-made monopolies
- privatisation so to address (socio-economic) environmental issues e.g. climate change
- Responsibility (CSR): 2007 British airway fire
- limit monopoly power to protect environment, workers, consumers etc in a free market
- For & Against Gov intervention
- + gov can support industry in economic crisis e.g. helped after COVID-19 (£1.5 million)
- - price wars
- + job creation
- -too many regulations
- + run the economy to benefit wider society
- + comprehensive deregulation =no price control or control of entry
- market structure
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