Tutor2u Essay Competition

Tutor2u Essay Competition-29
However if both airports have separate ownership, there is also a possibility of there being more competition through price, investment and innovation.Planning systems such as creating large new runways and terminals is a way that will restrict and distort competition by acting as a barrier to entry of new airports and expansion of existing airports.

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The Perfect competition structure describes several firms or sellers in an area or industry competing with each other.Market liberalisation is a way of making markets easier for new companies to enter, and this is what the competition commissionis trying to do, and to have other airports competing with them.Edinburgh and Glasgow are both owned by BAA and that common ownership is affecting competition between these two airports.In a monopolistic market, new firms have less opportunity to enter as the monopolies usually have higher prices, lower levels of quality of goods and set suppliers, making it difficult for firms to enter.It can be said the monopolistic markets affect the consumer is a negative way due to these reasons.It was also introduced to enable markets to work better and achieve a good level of economic efficiency and welfare.The UK Competition policy provides an environment for competition to occur.This means that it makes it difficult for new competitors to break into a market; it reduces the risk of new competition for the companies that are already in the market.Companies may lower their prices to an extent which would harm competitors to operate at a loss.Also a monopoly makes supernormal profit, which leads to an unequal distribution of income.If charged higher price for producing less, monopoly creates an artificial scarcity, the inefficiency of this is called deadweight loss.

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