A few Economic queries

Millions of subscribers;

Cable - 1.1
ITV Digital - 1.2
BSkyB - 5.7

Calculate the market share of BSkyB. 5.7/8 x 100 = 71.25% [Hmm is that the right way to calculate it?]

What does this data suggest is the market structure of this industry? - Is it a monopolistic industry?

My mind is just blank at the moment.. :frown:

Reply 1

ThePants999

14

Yup, that's all fine - at least on the data you've been given. One might consider the industry oligopolistic as ITV Digital does have some market power, but it does have many elements of monopoly, so that's a fair answer too.

Reply 2

ThePants999

14

Quick addendum - I would think market share is better calculated on share of total revenue rather than number of subscribers, so if you were researching it yourself that wouldn't be the correct way to calculate it. But as I said, you can only go on the data you're given.

Reply 3

~pixie~

yes it is monopolistic because the government defines monopolies as having more than 25% of market share.

Reply 4

RobSharpe

Slice'N'Dice

Millions of subscribers;

Cable - 1.1
ITV Digital - 1.2
BSkyB - 5.7

Calculate the market share of BSkyB. 5.7/8 x 100 = 71.25% [Hmm is that the right way to calculate it?]

What does this data suggest is the market structure of this industry? - Is it a monopolistic industry?

My mind is just blank at the moment.. :frown:

That's the correct way to do it!

A monopoly legally is defined as 25%+ of the market.
BUT in economic terms - a monopoly is when there is one firm in the market.

An oligopoly occurs when there are only a few firms in an industry. And the whole data response centres around the premise that it is an oligopoly.

How do I know this? I did the exact same data response Q an hour ago, LOL!

Rob :smile:

Reply 5

ThePants999

14

The Competition Commission usually apply that definition, though it isn't inflexible.

Economically, a monopoly doesn't necessary imply an industry with only one firm - just only one firm acting as a price-maker. It can have other firms, so long as they are price taking.

Reply 6

Slice'N'Dice

OP

2

RobSharpe

That's the correct way to do it!

A monopoly legally is defined as 25%+ of the market.
BUT in economic terms - a monopoly is when there is one firm in the market.

An oligopoly occurs when there are only a few firms in an industry. And the whole data response centres around the premise that it is an oligopoly.

How do I know this? I did the exact same data response Q an hour ago, LOL!

Rob :smile:

Cheers for the replies guys, better late than never!

Hah, yep It's an oligopolistic market isn't it? :biggrin:

Quite a good article in my opinion.

Reply 7

faa

Here is a question for you-

What variance could you expect to see in the demand for BSkyB if the British Broadcasting association decided to make tv licences 500 pounds per year........

.......... ie the demand would fall as you cant have Sky without BBC, but you can have BBC without sky- therefore BBC has a monopolistic effect on the market. However, it must be stressted that they would not really get away with that kind of charge, however, atleast it makes you think externally.......

A few Economic queries

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