BrightSpark supplies household electricity in one UK region. Four large firms dominate the market. Table 1 gives market and workforce data.
| Measure | BrightSpark data |
|---|---|
| Customers | 1,200,000 |
| Annual profit | £54 million |
| Engineer wage | £29 per hour |
| Engineer vacancies / qualified applicants | 240 / 80 |
| Call-centre wage | £13 per hour |
| Call-centre vacancies / qualified applicants | 160 / 1,900 |
[ITEM A] The four largest suppliers have 78% of regional customers. They argue that large networks spread fixed costs and allow major investment in renewable electricity and digital meters.
[ITEM B] Consumer groups report that some tariffs are difficult to compare and include exit fees. New suppliers face high technology and advertising costs, while complaints about slow customer service have increased.
Define the term 'oligopoly'.
Using Table 1, calculate BrightSpark's annual profit per customer.
Explain two ways BrightSpark might operate in a non-competitive market.
Using Table 1, analyse why BrightSpark's engineers earn more than its call-centre workers.
Do you think BrightSpark's customers benefit from the electricity market being dominated by four large firms? Use Items A and B and your own economic knowledge to justify your view.
149 exam-style questions on AQA GCSE Economics 1.5 Competitive and concentrated markets, covering 1.5.1a The range of market structures, 1.5.1b Distinguishing between market structures, 1.5.2a Characteristics of a competitive market, 1.5.2b How producers operate in competitive markets, 1.5.2c The economic impact of competition, 1.5.3a Characteristics of a non-competitive market, 1.5.3b How producers operate in non-competitive markets, 1.5.3c Monopoly and oligopoly, 1.5.4a The labour market and wage determination, and 1.5.4b Gross and net pay. Each one has a worked solution and a mark scheme showing where the marks go.