Essay Plans

"Monopoly is neither good or bad - it is the task of Competition Policy to ensure that it is the former and not the latter." Discuss.

SYNOPSIS:

Explain - with diagrams - how a monopoly can be 'bad' or 'good'. Outline the elements of Competition Policy - including the 1980 Competition Act. Examine whether it is the task of Competition Policy to intervene AT ALL.

POINTS:

  1. Define monopoly

  2. 'Bad' means high price, restricted output. Price becomes market price which is above market cost thus misallocation of resources.

  3. 'Good' means economies of scale pricing below that of perfect competition (illustrate) - natural market structure, research and development.

  4. Bring in current affairs showing how what we regard as a monopoly now in UK may be the MINIMUM size if we are to compete successfully in 1992. Support this with current mergers at the time.

  5. Outline Competition Policy - 1948, 56, 65, 73, 80 Acts.

  6. Deal specifically with the 1980 Act and concentration ratios (three areas of the Act - structure, conduct and performance).

  7. Outline the three possible approaches - non-interventionist; automatic; pragmatic and relate to current UK policy.
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