(Solved): Firms admit price-fixing of concrete drainage products Two materials firms have admitted breaking c ...

Firms admit price-fixing of concrete drainage products Two materials firms have admitted breaking competition laws by taking part in a cartel. The Competition and Markets Authority discovered that price fixing meetings went on for seven years from in the concrete drainage sector. Stanton Bonna Concrete Ltd and CPM Group Ltd have admitted breaking competition law by taking part in a cartel. The products were used in large infrastructure projects across Great Britain, including water management, roads and railways. Typical customers include engineering and construction companies; utilities providers; and local and national government. Michael Grenfell, Executive Director of Enforcement, said: "Cartels damage competition and lead to less choice, less innovation and increased prices for customers. "We've provisionally found that these three firms secretly shared out the market and colluded on prices for construction products used in many building projects across Great Britain. Source: www.constructionenquirer.com (adapted extract) (a) Explain the characteristics of an oligopoly market. How and in what [ 5 ] ways could the behaviour of the firms in the article be best explained in terms of being an example of an oligopoly market? (b) Explain with the use of a diagram why, if there is no collusion, oligopoly [ 5 ] firms will be reluctant to compete on the basis of price. (c) Analyse with the use of a diagram why it is argued that oligopoly firms [4] will seek to fix prices and maximise profits if successful collusion occurs. (d) Evaluate the view that "Cartels damage competition and lead to less [ 6] choice, innovation and increased prices for consumers"