Competition policy in the UK aims to ensure fair competition between businesses. It prevents anti-competitive practices like price-fixing, monopolies, and cartels, which can harm consumers by leading to higher prices, lower quality goods, and reduced innovation. The goal is to create a level playing field where businesses compete on merit, driving efficiency and benefiting the overall economy. It's all about protecting consumers and promoting a dynamic marketplace! ๐
Match the term to the correct definition:
| Term | Definition |
|---|---|
| 1. Cartel | A. The only supplier of a particular product or service. |
| 2. Monopoly | B. An agreement between firms to fix prices or divide markets. |
| 3. Price-Fixing | C. Selling a product below cost to drive out competitors. |
| 4. Predatory Pricing | D. Actions that prevent or restrict competition. |
| 5. Anti-Competitive Practices | E. An agreement between competitors to sell a product at the same price. |
Complete the following paragraph with the correct words.
The Competition and Markets Authority (CMA) is the main _______________ responsible for enforcing competition law in the UK. Its role is to _______________ that markets work well for consumers. The CMA can _______________ companies that engage in anti-competitive practices, such as _______________ or abusing a dominant position.
Word Bank: ensure, regulator, fine, cartels
Why is competition policy important for promoting innovation and economic growth in the UK? Provide an example to support your answer.
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