Critically examine the impact of increasing competition in the markets for electricity and gas.

      

Critically examine the impact of increasing competition in the markets for electricity and gas.

  

Answers


marlyne
In recent years the government has attempted to reduce the barriers to entry to the energy supply industry. Specifically they have forced incumbent firms to open up their network and infrastructure for use by competitors. This has reduced the cost of entering the UK energy supply sectors and has resulted in an increase in competition.
For example in NI the entry of Airtricity has brought competition to a market which had been dominated by NIE. This increased competition should lead to many benefits including lower price for consumers, improved efficiency, greater choice and higher quality.
However, it should be noted that increasing competition will reduce the ability of firms to earn supernormal profits which may in turn reduce innovation and investment in areas such as infrastructure and green technologies
marlinbito answered the question on July 5, 2018 at 14:47


Next: Explain the difference between natural and artificial barriers to entry.
Previous: Explain why the cost of supplying a litre of tap water is likely to be lower than the cost of supplying a litre of bottled...

View More Economics Questions and Answers | Return to Questions Index


Exams With Marking Schemes

Related Questions