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TECO602 Workshop 7 Problem Set - T3 - 2022

This document provides information about two case projects for a workshop on competition policy and anti-competitive behavior: 1) A case analyzing whether Australia Post's monopoly on standard mail delivery is appropriate. It lists questions about barriers to entry, arguments for and against the monopoly, and how Australia Post could be losing money while maintaining pricing power. 2) A case about Flight Centre being accused of price fixing and ordered to pay penalties by the ACCC. It provides links to related ACCC articles and defines price fixing. Questions analyze why charges were brought and the court's verdict. The document also includes links to the ACCC website to explore mergers, consumer rights, and the ACCC's role in postal services.

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Cyan Sea
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0% found this document useful (0 votes)
42 views

TECO602 Workshop 7 Problem Set - T3 - 2022

This document provides information about two case projects for a workshop on competition policy and anti-competitive behavior: 1) A case analyzing whether Australia Post's monopoly on standard mail delivery is appropriate. It lists questions about barriers to entry, arguments for and against the monopoly, and how Australia Post could be losing money while maintaining pricing power. 2) A case about Flight Centre being accused of price fixing and ordered to pay penalties by the ACCC. It provides links to related ACCC articles and defines price fixing. Questions analyze why charges were brought and the court's verdict. The document also includes links to the ACCC website to explore mergers, consumer rights, and the ACCC's role in postal services.

Uploaded by

Cyan Sea
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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TECO602, Term 3 2022

TECO602 Workshop 7 Problem Set

Case project 8.1: Is this monopoly a good idea?

On 20 November 2019, Australia Post provided The Australian Competition and


Consumer Commission (ACCC) with a price notification proposing price increases; on 6
December 2019, the ACCC approved the changes in prices relating to notified services
that were set out in Australia Post’s price notification. Visit
https://www.accc.gov.au/system/files/public-
registers/other/Australia%20Post%27s%20supporting%20information%20to%20its
%20price%20notification.pdf to learn more details. Visit
https://www.afr.com/news/economy/trade/acccs-rod-sims-says-1-stamps-not-a-
done-deal-20150907-gjgysi to read the article ‘ACCC's Rod Sims says $1 stamps not a
“done deal”’. Then answer the questions that follow.

Weblink

Go to the ACCC website at https://www.accc.gov.au/. Select ‘Public registers’, then


‘Mergers registers’, then ‘Merger authorisations register’ to see the mergers and
acquisitions on which the ACCC has made assessments. Some are approved with
enforceable undertakings, and some are rejected on the basis that they would lead to
monopoly power. To know more about consumer rights and guarantees, select
‘Consumers’ and then ‘Consumer rights and guarantees’. To learn about the ACCC role in
postal services, select ‘Regulated infrastructure’ and then ‘Postal services’.

1. What kind of barriers to entry have allowed Australia Post to continue as a


monopoly in providing postal services for standard mail in Australia? Explain your
answer.

2. What are the arguments against such a monopoly? Illustrate your answer with a
diagram.

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TECO602, Term 3 2022

3. What are the arguments for such a monopoly? Illustrate your answer with a
diagram.

4. Australia Post maintains a monopoly in the standard-mail market in Australia, in


that it controls both the infrastructure and the retail side of the industry. How could it be
losing money?

5. Why does the ACCC not simply allow Australia Post to increase the price of stamps
so that it can become profitable again?

6. What economic term best describes Australia Post’s pricing proposal?

Case project 9.1 Flight centre accused of price fixing


Visit https://www.accc.gov.au/media-release/flight-centre-ordered-to-pay-125-
million-in-penalties to read the article ‘Flight Centre ordered to pay $12.5 million in
penalties’ . Then answer the questions that follow.

Weblink
The Australian Competition and Consumer Commission (ACCC) defines a range of anti-
competitive behaviours on its website, including price fixing; see
https://www.accc.gov.au/business/anti-competitive-behaviour/cartels/price-fixing.
1. Why did the ACCC bring the charges against Flight Centre?

2. What verdict did the Federal Court return in response to Flight Centre’s appeal?
What was its finding?

3. Is there the possibility of non-price competition in this case?

4. Who gained and who lost from the alleged price fixing?
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TECO602, Term 3 2022

Case project 9.2: Government policy towards anti-competitive behaviour

The ACCC enforces the Competition and Consumer Act 2010. The main role of the ACCC
is to promote competition, fair trading and regulating national infrastructure for the
benefit of Australians.

Weblink

Go to the ACCC website at https://www.accc.gov.au/. Select ‘Business’ and then ‘Anti-


competitive behaviour’ to learn more about the anti-competitive practices.

Explain the difference between tacit collusion and price leadership in oligopoly
market.

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