Economics - Market Dominance

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  • Created by: Sophie
  • Created on: 01-06-13 20:49
T A U T I L I T Y R E G U L A T O R S Q F
D O J Y J F Y I K W O R K T N C D I H E W
N F G L Q D J E N H G U P F O E F W U O S
A F D K B E H T V G N W D Q C R L M X W K
G I O D K C R Y L S I F J P B A H T K Y G
A C M O M O P C Q Q C M B O X H C P D D O
S E I V D N N I Y D I U A U N S S A N P I
Y O N S U O L L W S R E R Y U T K B J W N
E F A V U M B O T H P V R N G E D R N H F
T F N R A I T P N W Y E I F M K G E J T G
L A T U B E G R N D R K E A M R E G C T H
U I F D C S T E J P O C R F O A G U E F Y
X R I N M O G G Y X T T S C N M N L C U K
O T R K O F V R S H A K T O O P V A V P M
E R M E D S C E U Y D R O X P E W T C C L
R A O O J C K M H P E B E K O X K I Q D X
K D T J B A S W Q E R E N O L D H O L D P
N I E O Y L S S U R P W T R Y M T N X C S
P N T H I E C D I K N O R P G M T W H V N
C G N H S E A V R R M R Y J M A K G U Y O
O M H Y E Y B P C B A E D G Q L T G U Y G

Clues

  • Can intervene if firms abuse their dominant market share position. Unfair practices include: Collusion/ Cartel - agreeing with other firms to artificially raise prices, Restricting competition, Tied in sales - excess prices or predatory pricing (6, 2, 4, 7)
  • Factors that obstruct or restrict entry to an industry or market (8, 2, 5)
  • Firm or one of a small number of firms that controls a significant share of the market which it operates (8)
  • Ofgem, Ofcom, Ofwat monitor industries privatised during the 80s and 90s. The regulators have used the power to introduce and review price capping and have sought to bring fresh competition into markets such as telecommunications, gas and electricity (7, 10)
  • Prices are deliberately set very low by a dominant competitor in the market in order to restrict or prevent competition. The prices may even be free or lead to losses by the dominant company. (9, 7)
  • Reduction in unit cost of production. One example of this is large companies buying in bulk and benefiting from reduced prices (9, 2, 5)
  • Rules set by the government or their agencies that seek to control the operation of firms who may have monopoly power in their own industry (10)
  • The competition commission can investigate a merger to see if it is in the public interest. If the commission thinks the new firm will have too high a market power and will act against public interest, the merger wont be allowed (6, 6)
  • The percentage of all sales within a market which are held by one brand or company (6, 5)
  • When one producer controls supply of a good or service and where entry of new producers is prevented or highly restricted (8, 4)

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