LIST TWO CHARACTERISTICS OF THE MARKET STRUCTURE OF ELECTRICITY OPERATING IN GREAT BRITAIN
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Answer:
THE MARKET STRUCTURE OF ELECTRICITY OPERATING IN GREAT BRITAIN IS OLIGOPOLY MARKET .
Its characteristics are :
1. Interdependence:
The foremost characteristic of oligopoly is interdependence of the various firms in the decision making.
This fact is recognized by all the firms in an oligopolistic industry. If a small number of sizeable firms constitute an industry and one of these firms starts advertising campaign on a big scale or designs a new model of the product which immediately captures the market, it will surely provoke countermoves on the part of rival firms in the industry.
Thus different firms are closely inter dependent on each other.
2. Advertising:
Under oligopoly a major policy change on the part of a firm is likely to have immediate effects on other firms in the industry. Therefore, the rival firms remain all the time vigilant about the moves of the firm which takes initiative and makes policy changes. Thus, advertising is a powerful instrument in the hands of an oligopolist. 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.
Under perfect competition advertising is unnecessary while a monopolist may find some advertising to be profitable when his product is new or when there exist a large number of potential consumers who have never tried his product earlier. But according to Prof. Baumol, “under oligopoly, advertising can become a life-and-death matter where a firm which fails to keep up with the advertising budget of its competitors may find its customers drifting off to rival products.”
3. Group Behaviour:
In oligopoly, the most relevant aspect is the behaviour of the group. There can be two firms in the group, or three or five or even fifteen, but not a few hundred. Whatever the number, it is quite small so that 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.
Explanation:
Answer:
"Ans: The two characteristics of Marketing Structure of the Electricity Operating System in UK are:
Generation of electricity: The electricity is generated at huge power stations and is connected to national transmission networks. The power can also be generated on a small scale and then connected to the regional networks for distribution.
Network and supply of energy: The electricity networks consist of the transmission and the distribution of power. The suppliers purchase the energy and then sell it to the consumers.
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