Question

List two characteristics of market structure of electricity operating in Great Britain

Answer 1

The characteristics are

1. Electricity generation: Mostly generated at large power stations which are connected to the national transmission network.

However, it can also be generated in small scale power stations connected to the regional distribution networks.

2. Electricity network and energy supply: Electricity network comprises of transmission and distribution.

Suppliers buy energy and then sell it to their customers.

Answer 2

Characteristics of market structure of electricity

Explanation:

Characteristics of market structure of electricity operating in Great Britain

1. Interdependence - It was an oligopolistic industry, so there was interdependence of the various firms in the decision making. Thus different firms are closely inter dependent on each other.
2. Advertising - A firm under oligopoly can start an aggressive advertising campaign with the intention of capturing a large part of the market. Other firms in the industry will obviously resist its defensive advertising.
3. Group Behaviour - In oligopoly, the most relevant aspect is the behaviour of the group. Each firm knows that its actions will have some effect on other firms in the group. In contrast, under perfect competition there are a large number of firms each attempting to maximise its profits.