What is competition Flashcards
ANTI-COMPETITIVE BEHAVIOUR
The term anti-competitive behaviour refers to any agreements or arrangements between firms that seek to restrain competition and thereby remove the automatic regulation that competitive markets achieve.
WHAT IS CARTEL
When firms agree to act or collude together instead of competing with each other -includes both price fixing and market sharing
WHAT IS MARKET SHARING
A market is divided into a series of smaller markets, each supplied by one of the firms, thus reducing competition
WHAT IS COLLUSION
General term describing agreements between firms - either price or market sharing - tor reduce coemption and increase profits
WHY IS COMPETITION important
Competition (producers) provides the spur for businesses to improve their performance, develop new products and respond to changing circumstances
Competition (consumers) offers the promise of lower prices and improved choice for consumers and greater efficiency
What is exclusive dealing
When one firm trading with another imposes some restrictions one the other’s freedoms to choose with whom or where they deal
What is the ACCC
The ACCC aim to create rules against anti-competitive conduct to ensure that there is fair and effective competition within Australia
Resale price maintenance
The supplier sets the price at which the retailer must sell their product
Predatory pricing
When a company with substantial market power sets its prices at a sufficiently low level with the purpose of eliminating or damaging a competitor
What is the ACCC
Australian Competition and Consumer Commission
Benefits of competition
Enterprise, innovation and creativity
More efficient resource use
Higher material living standards
Economic growth
