Oligopoly

Evaluate the level of contestability in the fragrance industry or another industry of your choice.

Evaluate the possible consequences for business decision making of increased market concentration. Refer to industries of your choice in your answer.

In October 2017 Scania, the Volkswagen-owned truck maker, was fined €880 million (£771 million) by the European Commission for colluding with five other truck manufacturers over a 14-year period. The firms had agreed to coordinate prices after experiencing additional costs of meeting emission regulations. With reference to an industry of your choice, evaluate why some firms engage in collusive behaviour.

Case study · The cost of living in the UK

With reference to Figure 1 and Extract C, discuss whether supermarkets charging similar prices for petrol is evidence of collusion. Use game theory to support your answer.

Case study · The UK online streaming services market

With reference to Figure 1, explain the market structure that best describes the market for UK online streaming services.

Case study · Changes in the nature of UK towns and cities

Discuss possible methods of price and non-price competition that firms could use to increase the value of sales on the high street.

Case study · UK branded coffee shop chains market

With reference to Figure 1, calculate the three-firm concentration ratio for branded coffee shop chains.

Case study · Markets for food and drinks high in fat, salt or sugar (HFSS)

With reference to Figure 1 and Extract A, explain what is meant by a ‘highly concentrated’ market for potato crisps (Extract A, lines 2–3).

Case study · Markets for food and drinks high in fat, salt or sugar (HFSS)

In Extract A, lines 15–16, it was suggested that some firms may respond to the advertising ban by cutting the prices of their products. Using game theory and the information provided in Figure 1 and Extract A, discuss the effects on firms of cutting prices in an oligopolistic market.

Case study · Branded coffee shops

With reference to Figure 1, briefly explain the market structure that best describes the UK branded coffee shop market.

Case study · Branded coffee shops

With reference to Figure 3 and other information provided, discuss the price and non-price strategies that Starbucks may use to increase profitability.

Case study · Supermarket price war, food waste and possible mergers

With reference to Figure 1 and Extract A, explain one likely reason for the change in the four-firm concentration ratio of the supermarket sector between 2010 and 2015.

With reference to the information on the preceding page, explain the market structure of mortgage lending in the UK.

Draw a simple two firm/two outcome game theory model to show why the chicken suppliers may have colluded.

Calculate the five-firm concentration ratio. You are advised to show your working.

The value of all mortgage loans was £1 601 billion at the end of 2020. Which one of the following is the value of Lloyds’ market share?

Which one of the following is most closely associated with tacit collusion?