CMA And Collusion

Question 1

What is the benefit of having an oligopoly for customers

Answer 1

Lower prices(economies of scale)
Long opening hours
Very wide range of products
Delivery(very variable times/same day/next day

Question 2

Why break collusion

Answer 2

• to gain more market share (by cutting prices)
• to avoid damage to business image
• to avoid being fined
• to make more profit/revenue
• advantageous for first mover

Question 3

What does the CMA do.

Answer 3

They regulate and investigate markets to check for anti competitive behaviour. They can implement fines and punishments.

Question 4

Disadvantages of the CMA

Answer 4

• Takes too long
• Punishments are not that punishing to a business
• lack of prosecutors
• Firms argue monopolies act in consumer interest
• time = 2 years +
• Many top workers for CMA end up working in the industry meaning the CMA investsigations don’t work as well