2 Describe the five-firm concentration ratio. The majority of markets for goods and services in Europe are highly competitive, and only a few markets are monopolies. For example, more than 70 per cent by value of goods and services bought and sold in the UK are traded in highly competitive markets. Where monopoly does arise, it is usually in the public services, although with privatisation public services have become more competitive.

But market power can still be strong in markets where privatisation attracts few new entrants, such as in the telecommunications industry. Less than 6 per cent of goods and services traded in the UK markets are essentially uncompetitive. Oligopoly is more common in manufacturin