GlaxoSmithKline and Pfizer choose to collaborate on HIV drugs
Here is an excellent highly relevant article on cooperative behaviour between oligopolistic giants. Two of the world’s biggest drugs companies GlaxoSmithKline and Pfizer have announced a plan to merge their HIV treatments in a joint venture. ViiV Healthcare is an attempt for both companies to limit the risks of costly races to find new profitable treatments for HIV/aids and give them an opportunity to counter the loss of the revenues as these companies lose patent protection and are open to competition from generic drug makers. It is a strong reminder of the very high fixed costs of research into new drugs; the long lead times between new drug development, testing and finally getting it to the market. And also the impact of the entry of generic drugs into markets once patent protection runs out. The new company has a 19% share of the global drugs market, in comparison to the Californian company Gilead’s 31%.
Drug firms’ collaboration pools HIV treatments (Independent)
IPO of HIV business is ‘up to shareholders’ (Telegraph)
Perfect Competition - Teacher Presentation
This revised PowerPoint presentation will help take students through the model of perfect competition. Links within the presentation encourage students to explore further by accessing relevant blog posts and video resources.
Launch interactive version of Perfect Competition presentation
Download printable pdf version (slides)
Rated: 
(3/5), based on 4 reviews
Human and social capital and pathways to prosperity
Tom Aedy picks an article by Michael Milken in the FT and focuses on the importance of human capital in a competitive global economy - Milken calls this the world’s most valuable asset.
read more...»Rated: (2/5), based on 1 review
Kindlenomics
Amazon has announced that it will start shipping the Kindle e-reader in the next few days. Leander McCormick-Goodhart is doubtful about whether this spells the end of books. The Kindle device is part of an increasingly contestable market space whose size is set to rise sharply in the months and years to come. I have added a few links to Leander’s blog post. According to Chris Nuttall in an FT blog last month “there are now more than 45 e-reader models available worldwide, according to E Ink, the dominant technology provider for their displays.”
read more...»Price elasticity of demand for stamps
The BBC reports that PostComm - the postal service industry regulator has given initial backing for Royal Mail to increase the cost of a standard first-class stamp by three pence. This would take the price up to 42p. At the same time, standard second-class stamps may rise by 2p to 32p. How will consumers respond to the price change? For many the price hike will have little effect - most of the stamps that I buy can be reclaimed as stationery expenses. But many smaller businesses spend heavily on mailshots as a part of their marketing. A rise in mail costs may cause them to consider making more effective use of their customer databases so that - for example - a 3000 mail shot volume is better targeted than before. Do you think that the price elasticity of demand for stamps is price inelastic - at least in the short term?
The Royal Mail is subject to a price cap agreed with their industry regulator. Since the Royal Mail‟s current price control was agreed in 2006, the Royal Mail has lost 9% of its mail volumes over the three year period to April 2009, largely through shrinkage of the total market including 20% of stamped mail. The Royal Mail has also had to face up to increased competition as the postal market has been fully opened up to competition.
Shrinking mail volumes has the effect of reducing capacity utilisation of their collection, sorting and delivery capacity and leads to a rise in the unit costs of the business. The Royal Mail is required by law to operate a universal service across the UK; it is a business that requires substantial economies of scale to remain profitable.
Explaining Creative Destruction
Leander McCormick-Goodhart provides an overview of the concept of creative destruction
read more...»Hold the phone!
For those of you are thinking of buying an iPhone, you would probably do well to wait until Christmas it seems. The exclusivity agreement between Telefonica-O2 and Apple is set to expire in the next few months, which could lead to an all-out price-war in time for the festive season. As the exclusivity is removed, it should make the market more contestable, and the price should fall.
read more...»Oracle-Sun merger
Despite getting clearance from the U.S Department of Justice, earlier this month, Europe’s top competition regulator today opened a full, in-depth inquiry into the proposed $7.4bn acquisition of Sun Microsystems by Oracle, citing concerns about the potential for anti-competitive effects if the merger went ahead unconditionally.
Browser Wars!
Over the summer, it seems that the browser wars have intensified, and Microsoft’s Internet Explorer’s virtual monopoly has its days numbered. Earlier this year, Google brought out its Chrome browser, to rival Microsoft’s Internet Explorer, and today it was announced that Google have signed a deal to get it in to Sony PCs.
Result of the 2009 RES Essay Competition
The Royal Economic Society and Tutor2U are delighted to announce that the winner of the Young Economist of the Year competition 2009 is Tiffany Young of St Catherine’s School, Bramley. First runner up is Doug Swift of Eton College with a joint third place awarded to Philip Edmondson-Jones of Berkhamsted School and Leander McCormick-Goodhart of Eton College. For further details please see the final judges report from this link.
Our congratulations go to all four students who will be awarded their cheques at the Society’s Public Lecture in London on Wednesday 25th November. Thank you to all those who entered from more than 200 schools and colleges. 38 entries were identified as Highly Commended and from these 13 made it to the final round of judging. We hope many of you will attend the Public Lecture on Wednesday 25th November in London or 26th November in Bristol, which will be given by Sir Partha Dasgupta on the subject of “Law and Morality in Economics”.
Most Popular Topic Tags on the Economics Blog
recession, demand, economics, unemployment, price, prices, inflation, investment, costs, profit, downturn, trade, supply, debt, confidence, euro, gdp, competition, employment, capacity, production, risk, china, oil, incentives, exports, housing, expectations, pay, manufacturing, sterling, food, profits, property, tutor2u, mortgage, globalisation, banks, revision, slowdown, borrowing, usa, retailers, emissions, airlines, innovation, deflation, dollar, supermarkets, entrepreneur, efficiency, monopsony, elasticity, aqa, welfare, consumption, economist, productivity, saving, keynes, opec, wealth, depression, moodle, depreciation, jobs, credit crunch, competitiveness, cars, google, stocks, infrastructure, economic cycle, environmental, strategy, tim harford, externalities, carbon, vle, subsidy, evaluation, management, eu, losses, protectionism, spare capacity, inequality, environment, poverty, monopoly, bank of england, construction, behavioural, macroeconomics, output gap, budget deficit, carbon trading, steel, wages, japan, commodities, oligopoly, currencies, imports, bbc, stagflation, contestable, cpi, agflation, farming, newsnight, choices, skills, regulation, survey, taxes, government failure, itunes, minimum wage, lse, climate change, paul mason, population, intervention, aviation, keynes society, fiscal stimulus, amazon, single market, pricing, dan ariely, cartel, eton college, pollution, interest rates, shareholder, london, rationality, redundancies, market failure, rpi, mpc, shipping, behavioural economics, germany, robert peston, india, rsa, reputation, facebook, income elasticity, stakeholders, current account, brazil, coffee, savings, microsoft, monetary policy, crowding out, barriers to entry, collapse, nationalisation, multiplier effect, suppliers, economies of scale, price discrimination, development, uk economy, quiz, quantitative easing, currency, apple, surplus, tesco, free, labour market, behaviour, tragedy of the commons, opportunity cost, open source, vat, smoking, poverty trap, ireland, growth, merger, edinburgh, ownership, discrimination, global, cost benefit analysis, oecd, supply chain, shareholders, scarcity, balance of payments, petrol, liquidity, duopoly, iphone, starbucks, trade deficit, happiness, etonomics, scrappage, human capital, capital, subsidies, immigration, eurozone, takeover, exploitation, ecb, paradox of thrift, taxation, wiki, advertising, iceland, utility, wants, labour force survey, cost of living, brand, poland, blog, speculation, foreign exchange, spain, indirect tax, robert frank, northern rock, roger bootle, ocr economics, hbos, animal spirits, heathrow, hotels, freight, federal reserve, kaletsky, price war, information failure, crude oil, gini coefficient, transport, creative destruction, leverage, sony, us economy, migrants, waste, information, fishing, milk, tax, government borrowing, budget, eu enlargement, anchoring, obama, entrepreneurship society, aggregate demand, peter day, recovery, needs, internet, forecast, european union, discounting, real income, copper, deficit, public sector, contestability, nissan, companies, david smith, fairness, standard of living, aqa economics, blogging, martin wolf, renewable, twitter, sentiment, labour mobility, collusion, imf, accelerator effect, geoff riley, income tax, obesity, guardian, fair trade, pubs, consumer welfare, res, disposable income, national debt, devaluation, consumer surplus, corus, vacancies, global economy, broadband, sub-prime, tariff, joint venture, vehicles, startups, yuan, immobility, income elasticity of demand, edexcel economics, redundancy, tata, walmart, relative poverty, youth unemployment, accelerator, tickets, coal, cash, pensions, edmund conway, base rate, russia, diesel, marginal cost, external shocks, movies, liquidity trap, contestable market, libor, stephanie flanders, fixed costs, comparative advantage, allocative efficiency, training, satisficing, hot money, rory cellan-jones, status races, price mechanism, healthcare, deleveraging, congestion, social entrepreneur, apprenticeships, hyperinflation, economic efficiency, migration, veblen goods, credit, financial times, evan davis, automatic stabilisers, age structure, cyclical, king of shaves, monopoly power, reserve currency, ryanair, wheat, ucas, scotland, carbon tax, positional goods, drugs, aldi, ebea, stimulus, deindustrialisation, chris coleridge, yahoo, organic growth, barclays, liberalisation, equity, richard thaler, pay cuts, royal mail, diseconomies of scale, logging, tax burden, bonds, savings ratio, will king, pension, demography, structural, gillette, job losses, ocr, nhs, house prices, cross elasticity, brics, redistribution, biofuel, nelson thornes, schumpeter, slump, markets, footfall, british airways, paul krugman, green revolution, income distribution, price capping, logic of life, ft, contraction, enterprise, the economist, eastern europe, general motors, natural monopoly, health, o2, deforestation, enlargement, producer welfare, economic welfare, asda, supply-side, research, landfill, social costs, long tail, jim o'neill, diane coyle, economax, energy, podcast, share prices, tariffs, external shock, profit margin, fiscal drag, green shoots, ftse, philip allan, hedge fund, students, buy to let, elasticity of supply, disincentives, ben bernanke, market power, retailing, trend growth, resources, declan curry, nokia, undercover economist, hysteresis, chris anderson, bric economies, dynamic efficiency, price fixing, fiscal policy, winners curse, zimbabwe, hamish mcrae, toyota, market structure, global business, john kay, compound interest, contestable markets, frictional, hedging, claimant count, repossession, public good, law of unintended consequences, royal economic society, sustainability, probability, sustainable growth, cambridge, robert skidelsky, vertical integration, economics teacher inset, rentokil, price regulation, business cycle, fairtrade, freemium, yields, national institute, nairu, costa, nobel prize, robert shiller, market, gender pay gap,All tags
ECONOMICS TEACHER RESOURCE NEWSLETTER
Join over 4,000 other Economics Teachers in the UK and around the world who receive the tutor2u Economics Resource Email newsletter. Get special offers, first news of latest resources, teaching ideas, conferences and workshops.
Recent Threads on the Economics Teacher Discussion Forums:
Posts in: General Economics Teaching
Good hotel in London for school trip
Competitive Markets
Diminishing Returns
Complementary goods - HELP Please!
URgent Help Needed
Equilibrium concept
The price of life
Extended Project Qualification
Economics course structure
Bank of England School Trip
