Bus Transport Essay -- Economics

Bus TransportA) The nature of the competition in the bus transport market is veryspecific. The article suggests competition is used to financial backing out newentrants to the market thus maintaining market share for the largerfirms, active competition takes place between small operators orbetween a large and a small operator.Further evidence suggests the competition was not of substantialbenefit to the consumer and only used to get one over on the firmsrivals, more services run on routes which where already reasonablywell serviced. However some methods of competition showed reasonablebenefits to consumers, charged lower fares than the incumbent. Yetin the long run predatory pricing is not a good thing, as it exiteventually push out competition, creating a monopoly where the price go away soon go back up again.Non-price competition is lacking in the market, difficult forsuppliers to differentiate their products. As long as the price isreasonable consumers will act on which service requires them to waitfor the shortest amount of time, i.e. the first bus to arrive or themost reliable service, not prepared to wait for a later bus whichmaybe more comfortable.Cumulatively this type of competition in a market has negativeeffects, can lead to congestion, pollution, and instability ofservices. thumping companies that actively compete are likely to looseout in the long run due to the nature of the Kinhed demand curvetheory suffering, as...