Unit 3: Oligopoly, price wars and unfair competition.

A battle between rival supermarkets Tesco and Sainsbury's over price comparison promotions may go to court. Click here to access the full article.

Here is a further article on price wars. Can all supermarkets be the cheapest?

Questions for discussion:

Assess the impact this form of competition will have on the consumer. (12 marks)

Unit 4: Aid and Development

Good presentation on how aid can help/hinder development...

Aid and Development from tutor2u

Unit 2: Inflation in charts 2013

Inflation charts from tutor2u

Warning All Economics Students

You are at risk of developing risky credit activities in later life as a result of studying Economics... Read THIS article to find out more.

Unit 3: Gas Oligopoly and Price Leadership

The market for retail gas supplies is mired in controversy and threats of direct government intervention to freeze prices should a new Labour government be elected in 2015. This week we have seen a classic example of the type of price leadership we expect to see in an oligopoly.

Hot on the heels of a steep rise in prices from SSE a few days earlier (SSE announced an 8.2% increase in domestic bills from 15 November) British Gas has announced that their own energy prices will jump by an average of 9.2% from November 2013. The average annual dual-fuel bill with British Gas will increase by £107 to £1,297.

Centrica argued that the climbing price is mainly due to higher costs for wholesale energy and delivering gas and electricity to homes, and the impact of the Coalition government's "social and (green) environmental programmes" which are paid for through customers' bills.

But now that two of the leading six suppliers have taken the decision to lift energy bills for household, commercial and industrial users, it can only be a matter of time before EDF, E.ON, npower and Scottish Power follow suit - this is a process known as price leadership and will be well understood by students of the oligopoly market structure.

One of the consequences of the frequent gas and electricity price hikes has been a substantial fiscal dividend for the UK treasury as this news article in the Telegraph makes clear.

Unit 2: Inflation - Winners & Losers

Inflation: different impacts on different people

How bad is inflation? Like any good answer, your response to this question will include an element of evaluation, probably wrapped up in a sentence containing the phrase "it depends". With inflation, the impact is significantly influenced by who you are. Stated simply, different groups of people have different experiences of inflation.

The best way to understand why this is the case is to remind yourself how inflation is calculated. The key concept is that there is an imaginary basket of goods (see above) which attempts to capture the average spend of the average household. The thing is, you're not average - so you have your own experience of inflation.

I've grouped together several articles on the subject of the measurement of inflation here, including the one discussed below.

Inflation is in the news this week, but my eyes have been drawn to a terrific article in The Economist that should be recommended reading to anyone who is interested in this topic. The main points being made are summarised in these two graphs that appear in the article:

Firstly, the fact that inflation is an average of the change in many prices:



Secondly, because different groups have different spending patterns, they experience different rates of inflation:

Unit 4: Primary Product Dependency

On the World Bank twitter account, President Jim Kim is quoted as saying that "Properly managed, new minerals wealth could transform Africa’s development." Back in June 2013, a new report from the African Progress Panel looked at this important issue and set out an agenda for maximising Africa’s natural resource wealth and using it to improve well-being.



Related essay Q's:

*(a) To what extent is primary product dependency a constraint on economic growth
and development in developing countries? (20)

*(b) Evaluate four ways in which economic growth and development might be
promoted in developing countries. (30)

Unit 1: Supply & Demand in action

Classic supply side factors in play in the article here

Questions to ask yourself for Unit 1

What kind of a good is sugar and is it elastic or inelastic?

Demonstrate the impact on a Supply & Demand diagram of a fire affecting Sugar Supplies from the main worldwide exporter.

Why is it that although export levels should remain the same from Brazil due to plentiful buffer stock there has been a price rise? Use another Supply & Demand diagram to explain this.

Unit 1: Falling coffee prices - farmers switch to Oranges

Here is a familiar tale - sharply falling world coffee prices are causing the terms of trade to drop and threatening the commercial viability of coffee production among many of Indonesia's small scale coffee farmers. Can stronger marketing and investment in processing help these farmers move up the value chain?

The price of coffee in Indonesia has dropped to a third of the price from one year ago, due to an oversupply of it in the world's market. This has caused many coffee farmers in Indonesia to stop growing coffee and switch to other plants, such as oranges.

Questions for discussion:

Why are coffee prices falling?
What does this say about the elasticity of supply of coffee?

Y12 Students should look in their exam packs at related questions. There are several on agricultural produce and some link to this elasticity issue.

Some of you may wish to think of questions yourself and prepare a case study question based con this information.

Unit 3: Economies, diseconomies of scale and natural monopolies

Excellent presentation on Economies and Diseconomies of scale. Also useful when revising Natural Monopolies.

Economies and Diseconomies of scale from tutor2u

Unit 3: Business growth, integration

Revision presentation on business growth, business integration and the factors affecting the shareholder returns from merger and takeover activity.

Business Growth Takeovers and Mergers from tutor2u

Related Exam Questions - all case studies will have some element of the above. Essential knowledge for successful exam results.

Unit 3: Past Questions on 'Game Theory'

Past Questions on Game Theory

Jan 11:

Game theory can be used to illustrate which of the following examples of competitive

behaviour?

A Price leadership in perfect competition

B Revenue maximisation in monopolistic competition

C Limit pricing in monopolistic competition

D Tacit collusion in oligopoly

E Price discrimination by a monopolist.

Jun 10 Q9 Part C – 12 Marks

Jun 11 Q10 Part C – 12 Marks

Jan 12 Q9 Part D – 16 Marks

Jan 12 Q10 Part C – 12 Marks

Jun 13 Q9 Part D – 16 Marks

Unit 3: Monopsony Power in Qatar

A deeply troubling report featured here in the Guardian. Qatar, one of the richest countries on the planet, will be hosting the World Cup in 2022. But much of the Gulf state's expansion is being built by some of the poorest migrant workers in the world. In the worst cases, employees are not being paid and work in conditions of forced labour. Thousands of workers from Nepal are trapped in jobs and wages very different to what they were promised.

Thank you Klaus...I have updated the post to include Dubai workers clip as well.




Related Exam questions:

1 In August 2009 the Competition Commission published a Groceries Supply Code of
Practice. Large supermarket chains were paying very low prices to some suppliers.
Which type of market power does this suggest the large supermarket chains have?
(1)

A Monopsony
B Monopolistic competitive
C Perfectly competitive
D Natural monopoly

E Competitive monopoly