Bus Transport

830 Words2 Pages

Bus Transport

A) The nature of the competition in the bus transport market is very

specific. The article suggests competition is used to keep out new

entrants to the market thus maintaining market share for the larger

firms, "active competition takes place between small operators or

between a large and a small operator."

Further evidence suggests the competition was not of substantial

benefit to the consumer and only used to get one over on the firms

rivals, "more services run on routes which where already reasonably

well serviced." However some methods of competition showed reasonable

benefits to consumers, "charged lower fares than the incumbent." Yet

in the long run predatory pricing is not a good thing, as it will

eventually push out competition, creating a monopoly where the price

will soon go back up again.

Non-price competition is lacking in the market, " difficult for

suppliers to differentiate their products." As long as the price is

reasonable consumers will act on which service requires them to wait

for the shortest amount of time, i.e. the first bus to arrive or the

most reliable service, "not prepared to wait for a later bus which

maybe more comfortable."

Cumulatively this type of competition in a market has negative

effects, "can lead to congestion, pollution, and instability of

services." Large companies that actively compete are likely to loose

out in the long run due to the nature of the Kinhed demand curve

theory suffering, as...

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