Case Study: How Gazprom Affected Its Consumers

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Title Maastricht University School of Business & Economics Place & date: Kerkrade 24-11-2015 Surname, First name: Vermeulen, Erwin For assessor only ID number: I6115969 1. Content Study: Economics and business economics 2. Language structure Course code: EBC1010 3. Language accuracy Group number: 18 4. Language: Format & citing/referencing Writing tutor name: Lawrence, C (Clive) Overall: Writing assignment: Main Paper (Task 10) Advisory grade Writing assessor’s initials Your UM email address: elh.vermeulen@student.maastrichtuniversity.nl First, the paper discusses the allegations made against Gazprom. Second it considers the welfare and analyze how Gazprom affected this. Then it discusses … To conclude, the paper reviews how Gazprom’s case affected its consumers. X The allegations One of the first allegations the European Commission made against Gazprom is concerned with Gazprom forbidding the resale of their gas (Riley, 2012). X This means that Gazprom sells their gas to their customers, but Gazprom’s customers are forbidden from selling their gas to other companies; they may only sell it to the customers. The Gazprom-customers have to take the quantity of gas that they have…show more content…
Monopolies are not good for the economy for several reasons; there will often be higher prices, lower quality products and more. For gas it is hard to get a better quality, it is a homogeneous market, all products are the same. But there are some characteristics of a Monopoly that are applied in this case. First, the price of gas. Because Gazprom is a monopolist it is easier to change the price, since there are no competitors in their area and barely any reasonable substitution good. Because of the lack of substitution and the fact that people cannot afford to not buy gas, Gazprom will be able to increase their producer surplus which will result in a decrease of the consumer
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