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Darlington The 1994 Bus War

Darlington The 1994 Bus War. Darlington The 1994 Bus War. In 1994 Darlington Transport Co was losing money and advertised itself for sale. Stagecoach was outbid by Yorkshire Traction but then advertised for drivers so they could launch a service of spoilers in the town.

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Darlington The 1994 Bus War

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  1. to analyse monopoly power

  2. to analyse monopoly power Darlington The 1994 Bus War

  3. to analyse monopoly power Darlington The 1994 Bus War

  4. to analyse monopoly power

  5. to analyse monopoly power

  6. to analyse monopoly power

  7. to analyse monopoly power In 1994 Darlington Transport Co was losing money and advertised itself for sale. Stagecoach was outbid by Yorkshire Traction but then advertised for drivers so they could launch a service of spoilers in the town. They promised £1000 signing on fee. 55 drivers were hired and Stagecoach ran services that shadowed DTC's. Then they announced the services would be free for a month. DTC went bust. Stagecoach tactics were described by the MMC as 'deplorable, predatory and against the public interest'. Stagecoach's reputation was damaged.

  8. to analyse monopoly power The Director of the Office of Fair Trading said: “I believe that the free fares contributed to the decision of DTC to cease trading. “Efficiency of operation should determine who should provide a service, not possession of resources to oust competitors”

  9. to analyse monopoly power Predatory pricing • What do you understand by predator? • In what way was Stagecoach acting as a predator in using this pricing strategy? • How could Stagecoach afford to run buses for free? • Who were the winners and losers? • Do you think what Stagecoach did is fair?

  10. to analyse monopoly power Is monopoly a good thing?

  11. to analyse monopoly power Is monopoly a good thing? • Economies of scale argument • Patent argument • Natural monopolies • Allocative inefficiency • Consumer choice suffers • No incentive to increase efficiency

  12. to analyse monopoly power

  13. to analyse monopoly power Monopoly power Monopsony power

  14. to analyse monopoly power

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