Analysis of Competition and Market Structures in UK Business Economics

This report provides an in-depth analysis of business economics in the UK, specifically focusing on the challenges and opportunities presented by competition and various market structures. The report begins with an overview of the UK's economic background and the different market structures, including perfect competition, monopoly, and oligopoly, and how they impact businesses. It then delves into the economic context, examining how competition affects businesses, commodity prices, and customer demands. The report utilizes statistical data to illustrate the effects of competition, including interpretations of demand curves and price fluctuations. Furthermore, it explores the role of the government in ensuring fair competition through regulations and policies. The report also includes a critical analysis of how competition impacts business success, highlighting both positive and negative effects. The conclusion summarizes the key findings, emphasizing the importance of business economics in decision-making and the role of government in maintaining a balanced market. References to books and journals are provided to support the analysis. The report highlights the importance of understanding market dynamics and government regulations for business success in the UK.

Business Economics

EXECUTIVE SUMMARY
The report is based on business economics and how UK is facing problem of competition
and the way that is impacting the economy of the place. The problems that are faced have impact
on business, by having good knowledge of business economics the country is able to understand
the conditions and make changes by implementation of policies that will help lead to economic
growth. In the report there is discussion of how the country is facing and dealing with the issue.
Role of government in making the condition stable my making laws and regulation. There is
critical analysis of what is the impact on the business related to the issue.

Table of Contents
INTRODUCTION ..........................................................................................................................3
Background of country and competition and market structures.................................................3
Economic context:.......................................................................................................................3
Statistical data:............................................................................................................................4
Role Of Government...................................................................................................................6
Critical analysis on how competition and market structures affects or could affect the success
of businesses in UK.....................................................................................................................7
CONCLUSION ...............................................................................................................................8
REFRENCES...................................................................................................................................9
Books and Journal.......................................................................................................................9

INTRODUCTION
Business economics is a structure of countries economical studies which evaluates the
functions, role, market conditions, market resources. All these functions are performed by
business organisation which creates impact on countries economy by their business practices.
This report in going to study about economical issue of UK regarding the problems of
competition due to various market structure. A business operate under types of structure and
welcome competition from different behaviour of business. the main aim of this report is to
analyse the impact of competition in the highly developed country UK. And how it affects on
business commodities and customers demands (Asoni, and Sanandaji, 2016).
Background of country and competition and market structures
United Kingdom has the largest market economy because of its highly developed
infrastructure, economical stability and market orientation. The country has its highest GDP
measurement and per capita income. UK is known to be the high income country due to being
fifth largest exporter in the globe. The country is specialised in the foreign direct investment
which enables high import and export opportunities. Through the past decades, UK has achieved
its high growth potential and being the largest industrialisation into the world. The most
advanced business are came from the countries territory which operates into the UK at first place
and make them that potential to expand it into other countries (Athey, and Luca, 2019). The
corporate sectors in the country are perform under different market structure such as perfect
competition, monopoly and oligopoly. Business under these structures are facing high
competition into the market due to different strategies, business behaviours, demand and supply,
scare resources and other factors. These market structure creates an issue of similar products,
prices and customer demands. Mainly the economy is influenced by different business practices,
their strategies to survive into the market.
Economic context:
A countries economy is highly influenced by the internal and external business practices
which are undertaken into different market structures of perfect competition, oligopoly and
monopoly. These structures defines each behaviour and aspects of performing a business.
Business are running to render product and services into the market but with differentiation into
products and prices, obligation to entry and exit into firms and barriers regarding setting up the

prices. The economy of UK facing a lot of competing in mainly perfect competition due to the
same product and prices over the market. This issues has create a severe issue in between the UK
supermarkets (González-Rivera, 2016). Frequent fluctuation into prices from high to low,
decreasing in the graph of demand and supply of products. Retail industry are making every
move to enhance their sale and profit by continuously changing in their prices and product
qualities so that it could be the best out of all the other companies in order to overcome the
competition into positive way. In influenced by these competition, countries economy has to
suffer with high inflation, alterations in product qualities, high foreign exchange rates into the
country which automatically rises import and export competition and taxation charges. The more
the economy will fluctuate in terms of prices and government factors, the more it has to suffer
with new amendments. These elements are being the reason of unemployment and unbalance
between demand and supply into the economy because of unnecessary changes into pricing
policies of products, customer will not prefer to increase their demand for that product any more,
Also, due to changes in money flow, countries monetary system also take a turn towards changes
in statutory rates of interest and fluctuation in credit facilities (Hill, 2016).
Statistical data:
Interpretations:

under this market competition the curve shows industry demand curve at DD. And AC,
MC are the constant level of price. In order to compete with the monopoly firm, an oligopoly
market would sell with high price and high quantity so that their AR would become more high.
Due to these fluctuation in prices economy suffer often changes into inflation rates. Therefore,
the industry would not survive in super normal profit and desires for more (Hitka, Kozubíková, and
Potkány, 2018).
Interpretations:
The figure shows a situation of two firms in which they thought of changing their prices
for their existing product and expecting that no other firm will response to their prices
decrement. The price is Po and the quantity is Qo. Both the firm enjoy elasticity in price and
demand. But then the other firm produce at D1 with less price demand curve. After it faces
competition from rival firm, the MR curve move to its in elasticity. This shows the competition
and price inflation into the economy.

This graph represents the competition level into different market structures which reflects
that there is high competition in perfect competition and low competition under monopoly.
Role Of Government
As the competition is rising and there is need of government to assure that the
competition is fair and transparent. In UK government plays a vital role in the success of
business. Government makes rules and regulations to conduct fair means in the economy.
Government can intervene in any way like directly and indirectly. Firstly government for various
framework to enhance fair and open competition in the market so as the firms are able to operate
effectively and gain success. Government has power to make laws like consumer laws that
assure that the consumers are not exploited and they are not pissed off due to the competition and
it is taken care that the market power does not exploit the customers and they are able.
Agreements are formed like Anti-competition agreement that assure that the big firms in
the market tare unable to dominate and the small firms are not exploited. They also make barriers
to entry of new firms when it is visible that there is already huge competition in the market.
Government also help consumers to make right choices and make them aware about the
information that is required by them (Prasetyo, and Kistanti, 2020).

Government assures that is competition is not harming the economic growth and takes measures
to control the unfair competition that is going on in the market and minimise the adverse effects
of such competition. Basically, government I responsible to to establish laws, make agreements
and build frameworks that helps in proper functioning of the markets. This directly helps the
business to be successful as the policies and laws are made in favour of the firms in such a way
that the economy also gets benefited.
Critical analysis on how competition and market structures affects or could affect the success of
businesses in UK
Competition basically means that two or more firms are dealing in same business and providing
the products and services at same or slightly different prices. There are two types of competition
one is direct under which the same product is sold to same customers, here in the business have
to make goodwill to attract customers as the competitor is also serving at same price and in
indirect competition the products and services are same but the means of achieving them are
different (Seitz, and. et. al. 2017).
Positive impact of competition on business
If the competitor is innovating products and is developing new product then the business
makes research and try to find out the strategies that can be developed and will help them to
compete in the market. The competitor serving with new products give motivation to the

business and they also focus on innovating the product. The better the competitor is performing
more will be the business attentive and will focus on customers needs and wants and try to make
there business more successful. This helps economy as a whole as due to competition they are
able to bring more profits that will lead to overall growth of the business.
Negative impact of competition on business
When there are many players that are dealing in same product and service then this
causes problems as it increase the cost of advertising, everyone is focusing on promoting their
product and service and want to gain a position in the market. The competitors start using unfair
means to attract the customers and that creates problem for the business. Also, consumers are
unable to make choices and are not able to select among the available options, which also loss
for the business as their sales go down due to competitive products they are offering. Additional,
when the competition rises then there is chance of government intervenes and then the alter the
laws and regulation that may cause negative impact on business and they have to suffer (Silva,
2019).
So competition till a level when it is fair is desirable and acceptable but when it rises then
creates problems for businesses and may also impact the economic growth of the country.
CONCLUSION
Business economics is a part of main economics and it helps the manager to formulate
decision making and achieve objectives in relation to economic benefits on the country. It studies
all the problems that are faced by the business due to the environment they are operating at. This
report focused on all the market structures like perfect competition, monopoly and more have
direct influence on the the competitiveness in an economy due to hight level of similarity in
products offered and the problem of competitive market in united Kingdom and the role of
government to control the competition and to protect the consumers from getting exploited.
Moreover, there is critical evaluation of effect of competition on business economy. The
economic problems explained in detail with statistical figures and a proper discussion is done to
understand the problem and take measures to maintain fairness in market.

REFRENCES
Books and Journal
Asoni, A. and Sanandaji, T., 2016. Identifying the effect of college education on business and
employment survival. Small Business Economics, 46(2), pp.311-324.
Athey, S. and Luca, M., 2019. Economists (and economics) in tech companies. Journal of Economic
Perspectives, 33(1), pp.209-30.
González-Rivera, G., 2016. Forecasting for economics and business. Routledge.
Hill, S., 2016. Managerial economics: the analysis of business decisions. Macmillan International Higher
Education.
Hitka, M., Kozubíková, Ľ. and Potkány, M., 2018. Education and gender-based differences in employee
motivation. Journal of Business Economics and Management, 19(1), pp.80-95.
Prasetyo, P.E. and Kistanti, N.R., 2020. Human capital, institutional economics and entrepreneurship as
a driver for quality & sustainable economic growth. Entrepreneurship and Sustainability
Issues, 7(4), p.2575.
Seitz, and. et. al. 2017. Online grocery retailing in Germany: An explorative analysis. Journal of Business
Economics and Management, 18(6), pp.1243-1263.
Silva, E., 2019. The state and capital in Chile: Business elites, technocrats, and market economics.
Routledge.