Chapter 6 Competition Policy And Contestable Markets Flashcards
Competition policy
Methods the UK and the EU authorities use in order to make marked more efficient
Contestable markets
Where there is free entry and free exit of other firms
Who is responsible for implementing policies concerning monopolies in uk?
Office of fair trading
Competition commission
Public interest
A term used broadly to cover the publics rights not to be exploited by firms abusing monopoly mower.
Nationalisation
State control of firms
Privatisation
Sale of government owned assets to the private sector
Deregulation
The process of removing government controls from markers
What are the powers of the European Commission?
Has powers to prevent and control mergers
Restrictive trade practises
Methods used by firms to reduce competition in market
Natural monopoly
A firm that can theoretically gain continuous economies of scale and where it is thus uneconomic for more than one firm to supply the market
Advantages of privatisation
Promoting efficiency Raises revenue for the govt Promoting competition Reducing the size of the public sector Promoting popular capitalism - enterprise culture
Disadvantages of privatisation
Worse allocation of resources under privately run monopolies
Externalities
Closure of loss making services
Short term ism
Public private partnerships
Partnerships between the private and public sectors to provide public services
Private finance initiative
A form of public private partnership in which private sector firms undertake the bulk of the work
Regulation
Involves setting rules and controls that restrict market freedom
