The Impact Of Eu Liberalisation Policy On The Uk Energy Industry

1542 WordsJun 17, 20157 Pages
This essay will detail the impact of EU liberalisation policy on the UK energy industry and relate this to a previous sample of a group of suppliers. This essay will discuss industry supplier concentration, oligopoly and monopolistic competition, the EU competition commission and potential single markets which are not yet subject to scrutiny by the competition commission. Industry supplier concentration measures how many suppliers there are in a certain industry. The amount of firms in an industry will affect whether the firms are involved in an oligopoly, a monopolistic market or a perfectly competitive market. Concentration ratios can be used to measure how concentrated a certain industry is. The most common concentration ratio used is the four-firm concentration ratio which measures the output of the 4 largest firms in the market and gives that as a ratio of the overall industry sales. Another method of measuring concentration within an industry is by using the Herfindahl Hirschman Index (HHI).This measurement is calculated by determining the market share of each firm, squaring each number then adding them together. If the number that is calculated is below 1000 it is considered to be of a low concentration and if it is above 1800 it is considered highly concentrated, however it can be between 0 (perfect competition) and 10,000 (pure monopoly). (MICROECONOMICS 2007) In the sample, the suppliers will be measured by a HHI as to show market concentration. It would not be

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