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.
|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.|