A2 OCR Economics F583 2016

thanks a lot again!#

so just to sum up, the only time id need to draw graphs are for changes in the NMW (then use increase in demand graph/mrp/monopsonist/bilateral monopoly graphs) and then also for wage rate changes (2 graphs: unemployment increase, and elasticity graph)?

if so, think ill start revising now i know what to do

Using a leisure market of your choice, discuss theextent to which it may be considered to be an oligopoly.

An oligopoly market is one dominated by a few firms whohave a significantly high concentration ratio i.e. a highproportion of the total market share lies in the hands of justa handful of firms. In the case of Premiership football the topfour teams that regularly appear to dominate the league,Manchester United, Liverpool, Arsenal and Chelsea maywell be considered to fit this description. Between them theycertainly have a significant share of the total revenueearned in the UK market, and each of them regularly appearin the top 10 money earning clubs in the world. They eachprovide a product that is in many senses generic, yet is soheavily branded it clearly provides evidence that significantnon-price competition exists between the businesses. Thisis probably more important in the worldwide market forPremier League merchandise, replica shirts etc, than athome where partisan allegiances might play a moresignificant part. Barriers to entry into this top echelon mayalso be said to exist as continued success in the top divisionof the English league yields handsome financial rewards.


These payments represent a significant proportion of themoney television stations around the world pay to theFootball Association who manages the league. This allowsthese top teams to buy the services of the best players,denying them to other teams, and consequentlyperpetuating their dominance. Year on year these top fourthen qualify for the equally lucrative European championsleague, which becomes increasingly inaccessible to the restof the clubs in the league and once again the barriers toentry grow. Surely the case for considering Premiershipfootball as an oligopoly market has solid foundations. Thetop 4 are the biggest earners repeatedly and the mostsuccessful on the field.On the other hand there are 16 other teams in the divisionwho could grow their businesses through success on andoff the field. Also each year due to promotion and relegation3 new teams join the league and 3 exit; consequently thereis the potential for change to occur especially over a numberof years. The rise and fall of Wimbledon FC being anexaggerated example of the potential to break throughperceived barriers. Certainly there is no convincingevidence that any of the top 4 clubs are making abnormalprofits as the Chelsea FC final accounts of the last couple ofseasons will testify. The apparent willingness of clubs toimmediately re-invest funds into playing staff purchase andsalaries is testament to the rejection of the idea that profitmaximisation is the main goal of these top clubs. Thirdly, inrecent times, there is evidence that price competition isbeginning to enter the market, with discount tickets on offerat an increasing number of Premiership grounds. Admittedlythese are less apparent at the homes of the top 4 teams buteven there signs are that to attract support to matchesagainst less popular opposition, lower ticket prices are onoffer.To conclude we have conflicting evidence as to the extent towhich Premiership football has become an oligopoly market.


In theory with sporting success any team could rise up theleague and challenge the top 4 clubs. The changingeconomic climate of the present time may even lend itselfmore favourably to such an occurrence. However, the hardevidence would appear to support the view that the marketis increasingly dominated by the top 4 clubs. Only oncesince the 1992/93 season has the league been won by ateam outside the top 4 clubs, indeed since the 2000/2001season only once has a team from outside finished in thetop three places, Newcastle in the 02/03 season. This surelyillustrates the increasing stranglehold this oligopoly hasgained on the market. They have secured financialdominance and won support on the world stage due to thehighly successful marketing of the league. Abnormal profitsare not necessarily in evidence, but that could just be due tothe curious nature of the product and the apparentreluctance of the owners of these clubs to follow theirnatural entrepreneurial instincts when it comes tomaximising profits. In football the top 4 are getting richerand more dominant in terms of success at the game, if notin terms of profitability, due to their reluctance to take cost ofproduction seriously.


a marking scheme answer for a few years ago so i doubt this will come up but as people predicted it, i decided to share!

Guys i am confused:

Low productivity leads to lower MRP and hence lower demand and therefore lower wages. But low skilled jobs also attract many workers as the qualifications required are low and supply is high and wages are low.

So are both arguments correct?

What is the difference between collective and local bargaining?

How can you write a good judgement?

Hi, can someone please post examples for the labour market. I have some for leisure industries, but I have none
!!!!!!!
As in so I have examples for the 15/20 markers if they ask for examples..THANKKS

For elasticities and what not?

You could compare surgeons (inelastic supply and demand) with waitresses (elastic supply and demand)

For segmented labour markets
Some barriers to entry are good, don't want to be operated on by a surgeon who lacks the qualifications or get into a taxi where the taxi driver doesn't have a license

For a perfectly competitive wage market and how it is able to equalise wages: mention how with a completely flexible market, if the wages of pilots are higher than brick layers, then more brick layers will become pilots thus equalising the wage (thus obviously assumes labour is homogeneous)

You don't need numerical examples for the labour market, just things like I've mentioned plus more

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Can someone tell me how you define the short run and long run factors of production question?

What are the effects of regulation on the leisure market

Thanks but I meant for trade unions really? Anything on that thanks a lot