Government Intervention In Markets Flashcards
0
Q
How can they punish monopoly firms for abuse of power
A
OFT can fine firms 10%of annual turnover
1
Q
Explain the work of the Competition and Markets Authority
A
Strengthening business competition and reducing anti competitive activities
- investigates mergers
- conducts market studies
- enforced consumer protection legislation
2
Q
How effective is government intervention?
A
Unlikely to be effective as cases may be difficult to prove
3
Q
Why is regulation necessary for privatised firms?
A
Acts as a surrogate for competition
4
Q
Explain price capping
A
Limit on firms price increase
in line with RPI-X
5
Q
Explain competitive tendering
A
An offer for organisations who are asked to tender for a contract
