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

The Allocative Role - 6
The Government has an allocative role in our economy. The Government will provide goods and services that the private sector will not. Why won't the private sector produce all the goods and services we need? Often because there is no profit to be made.

The market system cannot be relied on to provide the best level of a number of collective goods and services (also known as public goods) needed by a community. For example, we all consume the service of the ''fire brigade''. How is this possible; I've never had the fire brigade at my house, you say. You are consuming the service ''fire brigade'', whether you know it or not!

Since capitalism relies on the right of individuals to own private property, our economic system needs to produce the service that protects our property from fire. If we had a ''privatised'' fire brigade then only households that paid for ''fire insurance'' would receive the service. But if the owners of the houses next to you, on both sides, did not subscribe to the fire brigade, and you did, it is unlikely the fire would burn down their houses, and leave yours alone. Fire does not understand the law of contract.

Education is another public or collective service provided by government. If everyone had to pay for education, many disadvantaged groups would not be able to afford it. If the children of the unemployed, for example, can not receive an education, they will find it very difficult to find a job when they reach adulthood. These people would be unemployable, for life, and would become a long term cost to the public purse, as they would have to receive unemployment benefits for their entire lives.