3.6.1

Question 1

The competition and markets authority (CMA) aim

Answer 1

The main competition regulator in the UK
The key aims for the competition policy are to promote competition and ensure markets are efficient
They also protect consumer interests by keeping prices low and widening consumer choice

Question 2

Do governments intervene in the market to control monoplolies

Answer 2

Governments intervene in the market to control monopolies and prevent the abuse of monopoly power

Question 3

Why do governments intervene to control monopolies

Answer 3

Because of the potential market failure and loss of consumer surplus, that can result from a monopoly exploiting the market

Question 4

Government intervention to control monopolies:

Answer 4

Price regulation
Profit regulation
Quality standards
Performance targets

Question 5

Government intervention to promote competition and contestability

Answer 5

• enhancing competition between firms through promotion of small business
• deregulation and privatisation
• competitive tendering for government contracts

Question 6

Government intervention to protect suppliers and employees

Answer 6

Restriction on monopsony power of firms
Nationalisation

Question 7

Nationalisation

Answer 7

Occurs when private sector assets are sold to the public sector