EJC_H2Econs_Topic8

© Eunoia Junior College Economics Department 1 How to use this set of lecture notes? 1) BEFORE LECTURES – UNDERSTANDING CONTENT - Reference your notes against your H2 syllabus. Mark out the key concepts so that you know what you MUST know - Read your notes ahead so that you can focus on listening and capturing additional notes during lectures 2) During lectures – APPLYING CONTENT - Bring your hard copy notes along, and use your PLDs to refer to the lecture slides concurrently - Capture additional notes, especially the real-world examples where you can note down how concepts are applied and how economic analysis are developed in varying contexts - You should make use of a notetaking/consolidation tool to take notes during lessons and to consolidate your learning at timely junctures. Examples are MIRO, Notion, Goodnotes, Notability, Microsoft OneNote, KAMI, etc. The choice is yours! 3) After Lectures – TUTORIAL PREPARATION to use content flexibly to show application, analysis and evaluation skills - Revise concepts relevant for the case study and essay questions - Refer to the notes and use it flexibly to prepare your answers to meet question requirements. Pure memorisation will not work as it does not involve deep understanding. - Do share your notes with your friends to multiply learning!

© Eunoia Junior College Economics Department 2 Essential Questions: 1. What is the role of governments in addressing market dominance, a source of market failure? 2. To what extent do policies address the various negative impacts on economic agents and society? 1. Policies to Address Market Dominance, a cause of Market Failure 1.1 Types of Policies to Address Market Dominance – how each policy works and its limitations 2. Contestable Markets with Potential Competition, a case of Government Policy of Lowering BTE 2.1 2.2 2.3 2.4 Characteristics Factors Affecting Contestability Implications of a Contestable Market on Societal Welfare Criticisms of Contestable Market Theory CONTENTS

© Eunoia Junior College Economics Department 3 1. Policies to Address Market Dominance, a cause of Market Failure Market dominance refers to a situation in which a market is dominated by one or a few large firms, and it occurs in both the monopoly and oligopoly market structures. These firms have considerable market power; they are not only able to set prices but are also able to act in ways that preserve and enhance their market power. Market dominance is a source of market failure that results in the inefficient allocation of resources. As discussed earlier (under “Impacts), market dominance can bring about many negative impacts on society. Thus, government policies are often required to address these negative impacts. Similar to Topic 5: Market Failure, we will use the H-A-L framework to discuss government policies: