• Firm (Team) have monopoly over spectators
  • Because many people support only one team
    • Which means there are no substitute products
      • Hence demand is inelastic.
    • Spectators can only buy tickets and merchandise from the firm/team. One seller=Monopoly
    • Firms are price makers.
  • X  inefficiency as no competition so AC is higher than it should be
    • Productively inefficient as no competition.
    • Allocatively inefficient as P>MC
• Have ability to make LR profits provided they have enough fans
• They price discriminate
  • Different prices depending on Age, Home/Away, Quality of seat etc.

• Spectator Sports market lacks MonComp features
• Spectator Sports as a complete market is slightly MonComp
  • As each sport has its own differentiated submarket
• Inability to earn LR profit
  • But profit maximisation is irrelevant as utility maximisation (i.e. Winning) is over-riding objective.
    • THESE POINTS ARE NOT VERY STRONG

• High concentration ratio in BPL
  • Top 4 dominate league
    • Evidence:
      • Significant share of total revenue in UK market
      • Most successful in terms of trophies
• Significant non price competition in worldwide market
• High barriers to entry;
  • Continued success yield large financial rewards
    • I.e. Large sponsorship deals and advertising revenues
      • Leads to buying better players=more success
  • Almost perfect information reduces barriers
  • New entrants must win leagues and competitions to reach the top.
• Collude to provide events
• Compete to sell advertising space and sponsorship rights.
• Perfect oligopoly as homogenous product.

• High contestability at the bottom level
  • Anyone can form a local/amateur team
• Extremely low contestability at higher levels
  • Due to difficulty in achieving and reaching the higher levels from the bottom

• High Concentration Ratio
• High Barriers to Entry
  • Cost of Aeroplanes
  • National Airlines (incumbent firms) are subsidised
  • Large economies of scale
  • Purchasing: Fuel
  • Technical: Larger Planes
  • Limited number of takeoff and landing slots
  • Number of licenses for any route is limited
• Product Differentiation
  • Low Cost vs. Scheduled
• Non Price Competition
  • Quality of service
  • Legroom/Meals etc.

• Very Competitive
• Information is readily available
• High contestability means abnormal profits likely to be competed away reasonably quickly

·      Low cost airlines proof of contestability

Package Holidays

• High Concentration Ratio
• Product Differentiation
  • Destination
  • Quality
  • Advertising
• High Barriers for Entry
  • Strong Brand
  • Vertical Integration
  • Economies of Scale
• Price Maker
  • Price Wars
  • Kinked Demand Curve
  • Mature Market- Increase Market share by reducing competitors
  • LR, reduce P leads to reduce profit leads to increase in productive efficiency as they try to reduce cost

Specialist Holiday

• Small firms, low concentration ratio
• Low barriers to entry
  • Low advertising costs
  • No vertical integration as firms are too small
  • No economies of scale
• Products very differentiated
  • Specialist
    • Demand price inelastic, due to few direct substitutes

·      Anyone can become a small agent but hard to be an important player

• High concentration ratio
  • 5-firm concentration ratio is 74%
  • Small firms differentiate by catering for niche markets
• Similar product - showing movies
  • Differentiate by offering;
    • 3D films
    • Late night screenings
    • Range of food and drink
• High amount of non-price competition
  • Schedules of screening
  • Quality of facilities
  • Food and drink
• Some price competition
  • High price competition where chains are in close proximity to each other
• Some barriers to entry for large firms
  • Economies of scale
    • Managerial
    • Financial
    • Marketing
  • Good provision of information
• Large firms can make SR and LR profit
  • Due to high barriers to becoming a large cinema chain
  • However this can be reduced, as cinemas face competition not only from other chains but also from other media and leisure activities

·      Have a local monopoly in some regions

Contestability

·      Low contestability

o   As barriers to entry are high

o   Hit and Run tactics cannot be used

• Analogue TV has 2 large firms (BBC & ITV) plus Channel 4 & 5
• Digital TV is still oligopoly due to amount of other firms
• Product differentiation
  •  Genre
  • Timings
  • Schedule
  • HD
• High Barriers to entry
  • Vertical Integration
  • Economies of Scale
  • High Sunk Costs
• Price Maker
  • Potential for Price Wars
    • Some firms ban other firms from distributing their programs
• Some collusion from scheduling
• Some scheduling competition i.e. The Voice and The X Factor
• High Non Price Competition
  • Audience Share
  • Advertising
  • Sponsorship

• Similar product
• Subscription/ PPV
• High Concentration Ratio. One firm monopoly: BskyB
• High Barriers to Entry
  • Vertical Integration
  • High Economies of Scale

• Large number of small firms in niche markets
  • E.g. Religious/ International/ Home Improvement
• Low barriers to entry
  • Switch from analogue to digital made it easier to set up new channels
  • Cheap Programming
    • Quiz Shows
    • Repeat of old series

• High in niche market
• Low in generic market