Index
Introduction - 1
Defining A Market - 2
The Importance Of Competition - 3
The Result Of Competition - 4
Intervening In Markets - 5
The Allocative Role - 6
The Distributive Role - 7
The Regulative Role - 8
The Regulative Role (continued) - 9
The Role Of Government - 10
The Role of Government (continued) - 11
The Stabilizing Role - 12
Vertical and Horizontal Integration Defined - 13
Defining Market Structure - 14
How A Firm Can Grow - 15
Mergers and Takeovers - 16
Vertical And Horizonal Integration (Diagram) - 17
Why markets Vary in Structure - 18
Product Differentiation - 19
Product Differentiation (continued) - 20
Free Range ''Googs''- 21
Product Differentiation (continued) - 22
Non Price Competition - 23
Non Price Competition (continued) - 24
Defining The Types Of Market Structures - 25
Perfect Competition - 26
Perfect Competition (continued) - 27
The Market For Oranges - 28
The Market For Oranges (continued) - 29
Bitter Oranges - 30
Summary: Perfect Competition - 31
Monopolistic Competition - 32
True Blue Oranges - 33
Monopolistic Competition (continued) - 34
Oligopoly - 35
Oligopoly (continued) - 36
Oligopoly (continued) - 37
Kinked Demand Curves - 38
OPEC - 39
OPEC (continued) - 40
Monopoly - 41
Microsoft - 42
Why Monopolies Are Inefficient - 43
Revision Questions On Market Forms - 44

Bitter Oranges - 30
The orange juice manufacturing market in Australia is an oligopoly: a market that is dominated by a few large manufacturers.

These orange juice producers can buy either Australian oranges or orange juice concentrate from Brazil. Manufacturers face perfect competition amongst their suppliers. Oranges are produced by many, small scale, growers, throughout the irrigated areas of the Murray River and the Riverina district in Australia, and by thousands of similar small scale growers in Brazil. Consumers, on the other hand, of orange juice have only about half a dozen brands to choose from.

Market power in the orange juice market is unbalanced, and tilted in favour of the manufacturers. To redress this imbalance, many growers of agricultural produce form cooperatives, and negotiate the sale of their produce, together. They need to do this to have some power over price, in negotiations with the large supermarkets and processors of agricultural produce.

The Murray Citrus Growers' Cooperative Association argued in the late 1980's that many of its members would be forced out of business, unless returns to growers improved. The Association produced a break down of the cost of 2 litres of orange juice to consumers. Out of the $3.39 paid by the final consumer, $1.87 went to the manufacturer; 23 cents to the Federal Government in sales tax; 86 cents went to the retailer, leaving the grower with a return of 43 cents. The growers pointed out that in 1989, returns to growers had fallen from $350 per tonne to $120 per tonne of oranges. In the same period, retail prices did not change.

The growers wanted the Australian government to increase the tariff (or tax) on imported orange juice concentrate, to help improve the incomes of domestic growers. The Government refused.

Many growers went out of business. However, many others were able to convert to grape growing after their oranges were ripped out.