1. AS1: Business Studies (Spectrum of Competition)

2. Competition occurs when people can choose from a range of similar goods.
It can apply to labour, capital markets and the actual market for the goods and services.

3. Advantages and Disadvantages associated with competition
Forces businesses to be efficient
Direct competition forces prices down
Businesses look to new ways of implementing technologies
Lower prices for consumers
Businesses spend more money in research and
development

4. Market Structures
Perfect Competition – many firms exist, selling an identical product
Monopolistic Competition – Many sellers but each has a different product
Oligopoly – A limited number of large firms comprising an industry in which they compete
Monopoly – a market in which there is a single buyer

5. Perfect Competition Many firms exist Sell an identical product
Many buyers
No entry restrictions to the industry
Firms in the industry not perceived as having an
advantages over new entrants
Firms and buyers well informed regarding
competitor’s prices

6. Competitive market (monopolistic competition)
Relatively large number of small firms
Free entry
Similar but not identical products

7. Oligopoly Competition between a few Interdependence
Branding is very important
Prices normally well above average
Barriers to entry
Initial capital may be prohibitive

8. Monopoly No substitutes One single seller Prices are set
No barriers to entry

9. Office of Fair Trading
Aims:
Protects customers and explains their rights.
Ensures businesses compete and operate fairly.
Gives advice to members of the public on consumer
affairs
Fights against market abuse
Investigate the workings of the various markets
Enforces consumer protection laws
Takes appropriate against businesses who break the
rules

10. Competition Commission
Aims
1. Oversees proposed mergers
2. Checks that where monopolies do exist they are not
against public interest
3. To look at existing cases of possible monopoly abuse
It cannot take legal action. It can only advise the Office of Fair Trading

11. Ofcom Regulatory Body
Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services

12. AS1: Business Studies (Spectrum of Competition)
Ofwat Regulatory Body
body regulating water industry:
 a regulatory body set up to supervise water services in the United Kingdom after privatisation and deregulation