A powerful oligopoly?
Energywatch, an industry watchdog, has argued in a recent report to MPs that Britain’s electricity and gas supply industry is a “comfortable oligopoly” that feels little need to innovate or compete. They have called for the sector to be subject to a Competition Commission investigation.
Power companies are ripping off consumers Times Online (21/5/08)
Age of cheap power is over Times Online (21/5/08)
Call to investigate energy ‘oligopolies’ Guardian (21/5/08)
Questions
| 1. | Explain the main characteristics of an oligopolistic industry. |
| 2. | What aspects of the electricity and gas supply market would the Competition Commission consider if asked to investigate the industry? |
| 3. | Assess the extent to which the electricity supply industry exhibits oligopolist collusion. |