Macroeconomics: Analysis of Market Structures and Consumer Welfare

This assignment analyzes various market structures, including perfect competition, monopolies, and oligopolies, in the context of consumer welfare. It examines articles discussing the impact of market structures on consumer protection, the role of government intervention, and the effectiveness of antitrust laws. The assignment highlights the unequal bargaining power between consumers and producers, the importance of information flow, and the potential for exploitation in monopolistic and oligopolistic markets. The author agrees with the need for government intervention and the implementation of antitrust laws to promote competition and protect consumer interests. The methodology relies primarily on qualitative research methods. The assignment also covers collusive behavior among oligopolies and the rise of fintech companies in banking, underscoring the need for consumer data protection. The author believes effective antitrust laws and strict penalties for collusive behavior are crucial for protecting consumers from exploitative practices.

Macroeconomics
Students Name
Institution

Market Structure 1
Article 1
Gittins, R.(2019, Feb 25). It's not business-bashing, it's the public's moment of truth.
Sydney Morning Herald. Retrieved from https://www.smh.com.au/business/the-economy/it-
s-not-business-bashing-it-s-the-public-s-moment-of-truth-20190224-p50zvh.html
According to Gittins, the illusion that perfect competition guarantees consumer welfare
protection is more fictitious due to the fact that consumers and producers have unequal
bargaining powers. I hold the view that perfectly competitive markets accord consumers a
variety of products, free information flow, and relatively affordable prices hence fostering
consumer welfare. However, it’s true that sellers and producers have unequal bargaining power.
In a way, consumers have fewer bargaining power as compared to producers of commodities.
Also, the articles suggest access to consumer information is inadequate to guarantee
consumer welfare.In a way, the statement is true due to the fact that through information
consumers are aware of what they are purchasing hence influencing their consumption of various
goods and services. The author proposes government intervention to protect consumer welfare in
all market structures. I do agree that free markets are ideal for the protection of consumer welfare
due to the fact that there are consumer choice, free information flow and competition among
firms.
I do agree that perfect competition is ideal for the protection of consumer welfare to a
certain extent.

Market Structure 2
Article 2.
Hearn, D.(2019, Feb). Canadian, U.S. regulators asleep at the switch as monopolies thrive. Globe
and mail. Retrieved from https://www.theglobeandmail.com/business/commentary/article-canadian-
us-regulators-asleep-at-the-switch-as-monopolies-thrive/
According to the Hearns, it is imperative that monopolies should be kept under check in order to
protect consumers and encourage competition. Worth noting the European Union blocked the
monopolization of the railway transportation by blocking a megamerger between France and Germany.
The author believes that European regulatory frameworks have been more effective in promoting
competition and protecting consumer welfare, unlike Atlantic countries. However, the author faults the
Canadian government for failing to effectively enforce antitrust laws to encourage competition and
protect consumer welfare.
Essentially, economic concepts of free market exist to guarantee consumer protection by
advocating for perfect competition rather than monopolies. Under monopolies, there is restricted
consumer choice and relatively high pricing thus the likelihood of consumer exploitation. Monopolies
such as Google, Apple have not been subjected to antitrust laws according to the article thus creating the
need for consumer protection. Usually, monopolies charge high prices for their products due to lack of
competition and limited choice.
I hold the view that government intervention is key in protecting consumer interests due to the
likelihood of abuse of monopoly power.

Market Structure 3
Article 3
Smyth, J.(2019, Feb 3). Australian regulator vows to tackle ‘cosy oligopoly’ of big banks. Financial
Times.Retrieved from https://www.ft.com/content/d940092a-25f2-11e9-8ce6-5db4543da632
Basically, the author attributes the Australian banking sector as oligopolistic in nature because of four
banks dominate 75 % of the market share. In order to protect consumer welfare, it is suggested that there
be government intervention through the Australian competition and consumer commission. The
competition regulator aims to introduce flexible banking rules and antitrust measures to promote
competition. In my view, the implementation of antitrust laws will encourage competition and eradicate
oligopolies. In this sense, consumers will have a variety of banking institutions to choose from. In an
economic sense, oligopolies are likely to engage in collusive behavior thus undermining consumer
welfare. In addition to competition challenges, the author explored the technological angle of fintech
companies engaging in banking facilities.
I do agree with collaborated efforts between banks and fintech companies, banking services might
serve consumer interest due to easy accessibility and affordability. However, there are the challenges of
data protection and the misuse of consumer data. Worth noting, the four largest Australian banks were
accused of collusive behavior. This goes to show consumer were subjected to high prices due to the
collusive nature of the four banks. These allegations go to show the ineffective implementation of
consumer welfare strategies by the Australian government.

Market Structure 4
I hold the view that effective implementation of antitrust laws and strict penalties for collusive
behavior among oligopolies will be effective in protecting the consumer from exploitative practices
by oligopolies.
.
Methodology
Majorly,the authors relied on qualitative research methods which might be considered biased.

Market Structure 5
Bibliography
Hearns, D.(2019,Feb). Canadian, U.S. regulators asleep at the switch as monopolies thrive. Global Mail.
Retrieved from https://www.theglobeandmail.com/business/commentary/article-canadian-
us-regulators-asleep-at-the-switch-as-monopolies-thrive
Smyth, J. (2019, Feb 3). Australian regulator vows to tackle ‘cosy oligopoly’ of big banks. Financial
Times. Retrieved from https://www.ft.com/content/d940092a-25f2-11e9-8ce6-
5db4543da632
Gittins, R (2019, Feb 25). It's not business-bashing, it's the public's moment of truth. Sydney Morning
Herald. Retrieved from https://www.smh.com.au/business/the-economy/it-s-not-business-
bashing-it-s-the-public-s-moment-of-truth-20190224-p50zvh.html