IB Economics Market Power

Understand market power in IB Economics with real-world examples, diagrams, and links to monopoly, oligopoly, and perfect competition.

Use this page as your launchpad to everything you need: examples, evaluation tips, and deeper breakdowns of related subtopics.

Market power shapes every industry you encounter, yet most students struggle to analyse beyond basic market structure definitions. This comprehensive hub covers every aspect of market power you'll encounter in your IB Economics course, from fundamental monopoly theory and pricing strategies to cutting-edge competition policy debates and digital platform dominance.

What You'll Master:

Complete market power theory across all market structures
Real-world market power examples from tech giants to local monopolies
Current competition policy debates and regulatory case studies
Exam techniques and evaluation frameworks
Links between market power and other key IB economics topics

Full breakdowns of diagrams and evaluation tools are available exclusively in the IB Economics course.

Fundamental Theory & Concepts

Core Theory Posts

What Is Market Power Really? - IB Economics Definition
Understanding the difference between market power, market concentration, and market dominance, including barriers to entry fundamentals.

The Four Market Structures - Power Spectrum Analysis
Breaking down perfect competition, monopolistic competition, oligopoly, and monopoly through the lens of market power.

Barriers to Entry - The Foundation of Market Power
How natural, strategic, and legal barriers create and maintain market power across different industries.

Price Discrimination - Market Power in Action
First, second, and third-degree price discrimination as evidence and exercise of market power.

Concentration Ratios - Measuring Market Power
Using concentration ratios, HHI, and other measures to quantify market power in real industries.

Market Power Sources

Economies of Scale - Natural Market Power
How large-scale production advantages create natural monopolies and market dominance.

Brand Loyalty - Consumer-Based Market Power
How strong brands create market power through consumer switching costs and differentiation.

Network Effects - Digital Age Market Power
Understanding how network externalities create winner-takes-all markets in digital industries.

Patent Protection - Legal Market Power
How intellectual property rights create temporary monopolies and market power in innovation-driven industries.

Resource Control - Input-Based Market Power
Market power derived from controlling essential inputs, raw materials, or distribution channels.

Real-World Applications & Case Studies

Current Market Power Examples (2024-2025)

Big Tech Dominance - Platform Market Power
Apple, Google, Amazon, and Meta's market power across multiple digital platforms and ecosystems.

UK Energy Market - Oligopoly Power
How the "Big Six" energy suppliers maintain market power despite regulatory attempts at competition.

Pharmaceutical Patents - Innovation Market Power
How drug patents create temporary monopolies and pricing power in healthcare markets.

Supermarket Chains - Retail Market Power
Tesco, Sainsbury's, and other major retailers' market power over suppliers and consumers.

Digital Platform Power

Apple App Store - Ecosystem Control
How Apple's closed ecosystem creates market power through platform control and developer dependency.

Google Search - Information Gatekeeper
Google's market power in search and its extension into advertising, mobile, and cloud services.

Amazon Marketplace - E-commerce Dominance
Amazon's market power as both platform operator and competitor, creating conflicts of interest.

Meta Social Networks - Attention Monopoly
Facebook and Instagram's market power in social media and digital advertising.

Traditional Industry Power

UK Banking - Concentrated Finance
How the major banks maintain market power through switching costs and regulatory barriers.

Airline Alliances - Route Monopolies
How airline partnerships create market power on specific routes and through hub control.

Premier League - Sports Monopoly
The Premier League's market power in football broadcasting and merchandise.

UK Water Companies - Regional Monopolies
How regional water monopolies operate and regulatory attempts to control market power.

Market Structures and Power Analysis

Perfect Competition - Zero Market Power

Agricultural Markets - Approaching Perfect Competition
How commodity markets demonstrate minimal market power and price-taking behaviour.

Foreign Exchange - Highly Competitive Markets
Currency markets as examples of high competition with minimal individual market power.

Stock Markets - Information and Efficiency
How efficient stock markets limit individual investor market power through information dissemination.

Monopolistic Competition - Limited Market Power

Restaurant Industry - Differentiated Competition
How restaurants use location, cuisine, and atmosphere to create limited market power.

Clothing Retail - Fashion and Brand Power
How fashion retailers create market power through design, brand, and trend-setting.

Professional Services - Expertise-Based Power
How lawyers, consultants, and other professionals create market power through specialisation.

Oligopoly - Strategic Market Power

Mobile Networks - Infrastructure Oligopoly
How mobile network operators maintain market power through infrastructure requirements and spectrum control.

UK Broadband - Limited Competition
BT, Virgin Media, and other providers' market power in broadband infrastructure.

Aviation Manufacturing - Airbus vs Boeing
The global duopoly in large commercial aircraft manufacturing and barriers to entry.

Monopoly - Maximum Market Power

Microsoft Windows - Operating System Dominance
How Microsoft maintains market power in desktop operating systems despite alternatives.

De Beers Diamonds - Resource Control Monopoly
Historical and current market power in diamond mining and distribution.

Local Utilities - Natural Monopoly Power
How water, gas, and electricity distribution create natural monopolies requiring regulation.

Competition Policy and Regulation

UK Competition Framework

Competition and Markets Authority - UK Regulation
How the CMA investigates and controls market power through merger control and market investigations.

Market Investigation References - Deep Dive Analysis
CMA's power to investigate markets and impose remedies for competition problems.

Merger Control - Preventing Market Power
How merger thresholds and competition assessment prevent excessive market concentration.

European Competition Policy

EU Competition Law - Single Market Protection
How European competition law addresses market power across member states.

Google EU Cases - Tech Regulation Pioneer
European Commission's landmark cases against Google's market power abuse.

Microsoft EU Settlement - Software Monopoly Response
How EU competition policy addressed Microsoft's Windows and browser market power.

Global Competition Issues

Big Tech Regulation - Worldwide Response
Global efforts to address digital platform market power through new regulations.

China Competition Policy - State and Market Power
How China addresses market power while maintaining state control over key industries.

Cross-Border Mergers - International Coordination
How multinational mergers require coordination between competition authorities worldwide.

Cross-Topic Connections

Market Power and Efficiency

Allocative Efficiency - Market Power Impact
How market power reduces allocative efficiency through higher prices and lower output.

Productive Efficiency - Scale vs Competition
Balancing economies of scale benefits against competition costs in market power analysis.

Dynamic Efficiency - Innovation and Market Power
How market power can both incentivise and discourage innovation and technological progress.

Market Power and Development

Development Economics - Market Structure Impact
How market concentration affects economic development in emerging economies.

Multinational Corporations - Global Market Power
How MNCs exercise market power across countries and impact on developing economies.

Small Business Development - Competition Policy
How competition policy can protect small businesses from market power abuse.

Market Power and Trade

International Trade - Market Power Effects
How domestic market power interacts with international competition and trade policy.

Trade Barriers - Protecting Market Power
How tariffs and non-tariff barriers can protect domestic market power from foreign competition.

Global Value Chains - Supply Chain Power
How control over global supply chains creates market power and dependency relationships.

Current Statistics & Data (2024-2025)

Key Market Power Indicators

UK Market Concentration Levels:

Banking: Top 4 banks hold 75% of current accounts
Supermarkets: Top 4 chains control 68% of grocery sales
Mobile Networks: 3 operators serve 99% of UK market
Energy Supply: 6 largest suppliers serve 73% of households
Search Engines: Google has 93% UK market share

Global Tech Platform Dominance:

App Store: Apple and Google control 99% of mobile app distribution
Social Media: Meta platforms reach 3.96 billion monthly users
E-commerce: Amazon holds 38% of US online retail market
Cloud Computing: Top 3 providers control 65% of global market
Search Advertising: Google and Microsoft control 87% of search ads

Competition Policy Activity

UK Competition Enforcement (2024):

CMA opened 8 new market investigations
£2.3 billion in competition fines imposed
12 merger references blocked or approved with conditions
43 merger notifications reviewed
156 market study recommendations implemented

Global Antitrust Activity:

EU imposed €8.2 billion in competition fines
US filed 47 antitrust cases across all sectors
China's SAMR completed 426 merger reviews
UK-EU-US coordination on 23 cross-border cases
156 competition authorities worldwide now active

IB Exam Excellence

Question Techniques

Evaluating Market Power - Paper 3 Framework
Framework for analysing and evaluating market power cases in extended response questions.

Market Power Diagrams Made Simple - Visual Analysis
Monopoly diagrams, oligopoly models, and market structure comparisons for visual analysis.

Linking Market Power to Other Topics - Higher Level Analysis
Connecting market power to market failure, government intervention, international economics, and economic development.

Efficiency Analysis - Welfare Impact Assessment
Analysing allocative, productive, and dynamic efficiency impacts of different market structures.

Real Exam Questions

Past Paper Analysis: Market Power Questions - High-Scoring Responses
Breaking down successful responses to market power questions with examiner insights.

Market Structure Essay Planning - 15-Mark Structure
Planning and structuring long-form evaluation questions on market power and competition policy.

Case Study Analysis - Competition Examples
Using real-world market power examples effectively in exam responses with supporting data.

Data Response Techniques - Market Statistics
Interpreting and analysing market concentration and competition data in Paper 1 responses.

Emerging Issues & Future Trends

Digital Market Power

Artificial Intelligence - New Market Power Source
How AI capabilities create new forms of market power and competitive advantages.

Cryptocurrency Platforms - Decentralised vs Centralised Power
Market power dynamics in cryptocurrency exchanges and blockchain platforms.

Internet of Things - Connected Device Control
How IoT ecosystems create new market power through device interconnection and data control.

Sustainability and Market Power

Green Technology Patents - Environmental Market Power
How clean technology patents create market power in the transition to sustainable economy.

Carbon Trading - Environmental Market Design
Market power issues in carbon trading systems and environmental markets.

Circular Economy - Resource Control Redefined
How circular economy principles change traditional market power based on resource control.

Future Competition Challenges

Space Economy - Extraterrestrial Market Power
Emerging market power dynamics in space tourism, satellite services, and asteroid mining.

Quantum Computing - Next-Generation Advantages
How quantum computing capabilities could create unprecedented market power advantages.

Biotechnology Convergence - Life Sciences Power
Market power implications of converging biotechnology, AI, and healthcare industries.

Why This Hub Matters for Your IB Success

Understanding market power isn't just about memorising market structures - it's about recognising how firms gain, maintain, and abuse market dominance across every industry you study. Every post in this hub connects to your broader IB Economics understanding, whether you're analysing pricing strategies, evaluating competition policies, or discussing innovation incentives.

For Maximum IB Exam Success:

Use real market power examples from this hub in your essays
Connect market power analysis to efficiency, welfare, and policy topics
Practice diagrams using the visual techniques covered
Develop balanced evaluation skills using the competition policy frameworks
Link market power to international trade, development, and environmental economics

Ready to Master Market Power? Start with the fundamental theory posts, then explore the industry case studies that interest you most. Each post builds your understanding while giving you concrete examples for exam success.

This hub is regularly updated with the latest competition cases, policy changes, and exam requirements. Bookmark this page and return regularly as you progress through your IB Economics course.

For access to all key diagrams, model answers, and exam strategies,

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