Context for Regulation and Competition Policy

Question 1

Example of merger being blocked

Answer 1

3 and 02

Question 2

Example of merger being permitted

Answer 2

Orange and T-mobile to form EE

Question 3

Where has RPI-X been used?

Answer 3

water industry forced to cut prices by 10% in 2000

Question 4

Where has RPI+K been used?

Answer 4

water industry - £130bn investment

Question 5

Example of regulatory capture?

Answer 5

American regulators and BP
- gave permission for free permits to drill for oil - oil spill killed wildlife

Question 6

Example of profit regulation?

Answer 6

US in the 70s for regulating monopolistic water companies - increase efficiency

Question 7

Example of performance targets and quality standards?

Answer 7

ScotRail - 91.3% of trains on time
NHS - responding to AnE patients in less than 4 hours

Question 8

Example of deregulation?

Answer 8

Taxi market - no longer have to pass geography test (entry of UBER)

Question 9

Example of privatisation?

Answer 9

BP being sold to private investors because Thatcher believed it to be inefficient

Question 10

Example of competitive tendering?

Answer 10

NHS used competitive tendering to outsource catering

Question 11

What is competitive tendering?

Answer 11

when the government outsources specific job contracts to the private sector. Private sector firms bid to win the contract, by offering the best deal - the highest quality for the lowest cost. The government then chooses the firm which offers the best value for money - and awards them the contract!

Question 12

Examples of anti-competitive practices?

Answer 12

price collusion
predatory pricing
vertical integration

Question 13

Examples of how to help small businesses grow?

Answer 13

access to loans
R&D breaks
subsidies