Tuesday, April 22, 2008

Unit 2: Market dominance; BAA and airport operation

This BBC clip says that the CC are to investigate market dominance in the airports of the UK owned by BAA

http://news.bbc.co.uk/1/hi/business/7361447.stm

The Guardian article also has an article on this

http://www.guardian.co.uk/business/2008/apr/22/baa.competitioncommission

a) How does the free market fail?
b) Why is it argued that BAA is neithe rproductively nor allocatively efficient?
c) What actions could be taken if the final CC report finds BAA "guilty"

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