The Sydney Morning Herald: Article Summary

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Recommended: Advantages and disadvantages of competition

This essay will examine and discuss the key issues that arise in the article by ‘The Sydney Morning Herald’. This essay will discuss the article in context with economic topics of monopoly, competition and efficiency. The article discusses various factors which affect and have an impact on independent retailers in the market. A call for the government to intervene in the matter has been made, due to big companies such as ‘Woolworths and Coles’ having an upper hand on market power as it will ‘engage in conduct that will effect substantially on lessening competition’ (The Sydney Morning Herald, 2015). The government needs to regulate anti-competitive behaviour and market monopoly in order to maintain a level of competition within the market, …show more content…

According to Hubbard et al. (2012 pp. 212), monopoly is ‘a market structure in which there is only one seller of a good or service that does not have a close substitute’. In addition to that, Coles argues that bringing in smaller firms and competition will eventually lead to prices rising, whereas The Masters Grocers Australia and Liquor Retailer Australia (MGA/LRA) want the government to step in and implement laws which will prevent independent firms from anti-competitive behaviour and implement a perfectly competitive market for small business. Another argument that is raised in the article is that by ‘taking away independent retailers ability to trade on days when their larger competitors are closed will ultimately have a detrimental effect on their survival’ (The Sydney Morning Herald, 2015). In this case this would lead to a ‘shutdown point’ (Hubbard et al, 2012 pp. 192) for smaller businesses, as there will be no competition in the market which means smaller and independent businesses shutting down due to inefficient level of output in the

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