Oligopoly

Evaluate the view that oligopolies serve society well.

According to the kinked demand curve model of oligopoly, which one of the following would be most likely to explain price stability in an oligopolistic market?

Extract E (lines 16–17) states that, ‘Supermarkets set prices interdependently, and price wars look very likely.’

With the help of a diagram, analyse the impact on grocery consumers of interdependence between supermarkets.

Extract E (lines 17–19) states that, ‘ the price gap between discounters and conventional supermarkets is now about 10–12%, against more than 20% a few years ago.’

Evaluate the view that the supermarket sector is serving customers' interests well.

Extract C (lines 1–3) states: ‘The market for most generic drugs is oligopolistic, with just two or three manufacturers making each product. This enables significant economies of scale within firms, but also presents the risk of consumer interests being harmed.’

Using the extracts and your knowledge of economics, assess the view that the market structure of the pharmaceutical industry is damaging for consumers.

The diagram below shows the kinked demand curve (D) for a firm operating in a competitive oligopolistic market.

The kinked demand curve model provides an explanation of why the

Explain how the data in Extract A show that the market power of the Big Four banks is weakening against competition from smaller rivals.

Extract B (lines 4–6) states that ‘banks do not feel enough pressure to compete on price or quality, leading some to call for the Big Four to be split into a number of smaller banks.’

Use the extracts and your knowledge of economics to assess the view that the government should intervene further in the banking sector to promote greater competition.

Which one of the following is most likely to measure the degree of competition in an

After considering Extract E, and the original evidence in Extracts A, B, C and D, would you recommend to the members of OPEC that they continue to restrict the supply of oil to try to raise the world market price of oil? Justify your recommendation.

Using the data in Extract A (Figure 1), calculate the three-firm concentration ratio in the UK parcels delivery market. Give your answer, as a percentage, to one decimal place.

Evaluate the view that government regulation of monopolistically competitive markets is unnecessary, and that polices to encourage competition and prevent the abuse of monopoly power should focus entirely on oligopolies and monopolies.