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Linking the Broadcast Media to the Specification
Sections of topic
Need to know terms/phrases
References to Case Study
4.3.1b: Do Markets Always Work?
What Market Failure Means
Less than optimum allocation of resources ­ when `resources' (i.e. land, labour,
and capital) are `allocated' to various industries and maximum benefit is
achieved, the economy achieves `optimum allocations of resources'.
Therefore `LESS than optimum allocation of resources' is when resources are
not allocated efficiently enough to achieve maximum benefit and MARKET
FAILURE occurs.…read more

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Programmes containing sex and violence may be considered demerit goods.
*See Evidence I ­ adverse health effects of watching too much TV.
Equity and Equality
*Explained in 4.3.4b
What Are Externalities And How They Affect An Economy
Externalities are external benefits or external costs. They occur when
consumption or a production decision affects a third party.…read more

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This leads to question, what would we do without the government income of
taxation, in this respect are externalities acceptable?
Costbenefit Analysis ­ weighing up potential financial gains against potential
financial costs. (I.e. comparing private costs with private benefits).
E.g. the Governments decision to switch off analogue signal over 20092012
following Digital TV.…read more

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Should Markets Be Regulated?
Why Regulation Is Needed
Protection of consumers
Monopolies and oligopolies can charge higher prices and produce a lower
output than the same industry would if it had a competitive structure.
These noncompetitive structures are an example of Market Failure.
It results in a lessthanoptimum size of industry, also, the higher prices for
consumers increases inequality.
1923 government took over BBCompany and renamed it BBCorporation. The
monopoly led to laziness of employees (Xefficiency) which ended up becoming
inefficient.…read more

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In 2007 BskyB purchased a share holding in ITV of 17.9%, the CC said this
would damage competition so instructed them to reduce its shareholding to less
than 7.5%.
In 2008 BBC, ITV and Channel 4 proposed a joint venture for VOD known as
Project Kangaroo. The CC said the venture would control the vast majority of UK
content and would result in substantial lessening of competition and for this to be
blocked. *See Evidence F.…read more

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