Theme 3 AO2 Flashcards
Three businesses bid to build a new hospital for the government but they secretly arrange who will win the bid. What type of collusion is this?
This is open collusion and is specifically bid-rigging.
Two concrete providing firms decide to only sell their concrete to two regions in the UK that they have agreed upon. What type of collusion is this?
This is open collusion and is market sharing.
The top three hair product firms decide to all sell their shampoo bottles £15 rather than the lower prices they were all charging before. What type of collusion is this?
This is open collusion and price fixing.
In the potato farming market, there are loads of small farming firms and loads of consumers who want to buy the potatoes. The potatoes are also very similar. What type of market is this?
This is perfect competition.
The technology firm Apple has over 37% market share and is constantly making supernormal profit. What type of market is this?
This is a market with a monopoly (Apple).
In an industry where firms utilise EOS and there is high brand loyalty, what is the contestability.
It is likely to be low.
British Airways charge more for last-minute bookings. What is this?
This is third degree price discrimination. Consumers booking last-minute are likely to have a low PED and therefore BA charges more.
