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14 Cards in this Set
- Front
- Back
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Competition and markets authority |
CMA- the uks primary competition authority. Carries out investigations in mergers, markets and industries to ensure high level of competition |
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European Competition Commission |
Prevents anti-competitive behaviour eg cartels and mergers in EU |
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Substantial Lessening of Competition |
When a merger has significant effect on industry rivalry over time and therefore on the competitive pressures on firms to improve their efficiency and innovation |
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Price cap |
A form of regulation that sets a cap on the amount that certain firms can raise their prices |
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Regulatory capture |
When a firms in an industry are able to influence a regulatory body |
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Three advantages of price caps |
-prevents dominant firms from making high unnecessary profits - increased consumer surplus -allows firms to keep some profit for dynamic efficiency |
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4 problems of price capping |
-regulatory capture -asymmetric information -loss of jobs as firms cut costs -less dynamic efficiency |
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Profit controls |
Firms are allowed to make a certain level of profit and after this point are taxed 100% |
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Quality and performance standards |
The government create a body that checks the quality of goods monopolies/oligopolies are providing and fines them if poor |
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Deregulation |
Reducing government controls on an industry to increase incentive for firms to set up |
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Contracting out |
Private firms produce the goods and services that are then payed for by the government and provided to people as a public good |
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Competitive tendering |
Competition between private firms to try and win a contract to provide a good for the government |
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Privatisation |
The government transfers their ownership of enterprises to the private sector- argues increased competition and efficiency |
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Nationalisation |
Ownership and control of an industry by the state- argued allocative efficiency over profit max |
