Market Power and Market Failure Flashcards
What is a merit good?
a public and private sector good e.g. healthcare/education
what is a public good?
Impossible to charge people so provided for by public sector for safety/ better quality of life e.g. streetlights/parks
Why might there be government failure?
Insufficient information, distortion of price signals, unintended consequences and excessive admin costs
what is bid rigging?
when one firm submits a high bid whilst the others submit a low bid
what can niche markets lead to?
Natural monopolies (depending on PED)
what % of labour does the public sector buy making them a monopsony?
19%
What labourers can be called monopolies because of the high entry barriers and price?
Highly skilled labourers e.g. barristers
What does a public good need to be?
Non-excludable and non-rivolous
what is a demerit good?
Value is overestimated and so it is over consumed which has external costs e.g. fast food
How much does UK car congestion cost for firms a year?
£19bn
What did Athens do in 1980s to combat air pollution?
odds+ evens
what does London have for pollution?
congestion zones/charges
What is Bristol’s car club?
They have 25 cars, pay £15 a month, save £1000
What types of gov policy is there?
Regulations (command and control), traceable permits, taxes and legislation, subsidies
