market structures case studies

Question 1

give an example of conglomerate integration. why did the CMA allow it to go ahead?

Answer 1

• merger between EE (mobile network) and BT (landline)
• allowed by the CMA as there was very little overlap between operations meaning it is unlikley to reduce competition

Question 2

give an example of succesfull second degree price discimination.

Answer 2

80% of tesco consumers use a club card

Question 3

give an example of third degree price discrimination.

Answer 3

train prices or cinema tickets

Question 4

give an example of a firm with very low sunk costs due to their use of the internet.

Answer 4

ocado, no in person stores

Question 5

what % of advertising did the guardian say has no impact?

Answer 5

99%

Question 6

what is an example of a monopolistically competitive market?

Answer 6

• fashion industry
• low barriers as fthe growth of the internet means firms only need a website. e.g Bohoo and Asos

Question 7

what are tescos profits and how have they changed?

Answer 7

£2.3 bn up from £883 million

Question 8

what is tescos market share?

Answer 8

27.3%

Question 9

what is apples market share?

Answer 9

• 24.7% market share

Question 10

what feature of apple allows it to ensure the quality of prodution.

Answer 10

• it is completely vertically intergrated
• apple controls hardware, software (app store) and services

Question 11

in 2023, how much did apple invest?

Answer 11

29.9 billion into R&D

Question 12

What % of people in the UK use private health care?

Answer 12

• 22% use private health care

Question 13

what are median waiting times for the NHS?

Answer 13

• 14.5 weeks

Question 14

what is the market structure of the tap water industry? By how much did prices rice by in april?

Answer 14

• firms have monopolies in different areas of the UK
• prices rose by £28 a year in the uk (above the rate of inflation)

Question 15

how much has been paid out to shareholders by water companies? why is this an issue?

Answer 15

• share holder dividends since 1989 have reached £57 billion
• there are still huge issues with leaking pipes

Question 16

what are the average profits for online fashion industries?

Answer 16

• 4%- 13% of revenue

Question 17

how are firms in the clothing market able to sell their products for such low prices?

Answer 17

• outsourcing production to countries with cheap production costs e.g china

Question 18

give an example of when cost cutting came at the expense of the consumer?

Answer 18

• one of the 6 hormones used in beef production is carcenogenic

Question 19

give a statistic that suggests water companies are abusing their monopoly power.

Answer 19

• sewadge discharge increased by 129% compared to last year
• raw sewadge was discharged for more than 4 million hours

Question 20

what type of economies of scale will water companies benifit from?

Answer 20

• technical economies of scale
• can invest in high tch filtration technology that increases productivity

Question 21

Give an example of X inefficiency in the NHS.

Answer 21

• NHS ‘super managers’ who earn up to £250,000
• increase average costs of the NHS

Question 22

what is the markup on beats headphones?

Answer 22

• 2000% mark up on headphones
• cost £10 to make
• sold for £200

Question 23

give an example of overt collusion.

Answer 23

OPEC
- agree a certain price and quantity

Question 24

how many users does tiktok have?

Answer 24

over 1 trillion