Market structure principleCurrent condition in local ferry services in Hong Kong(Outlying Island)The number of ferry operators in Outlying IslandsThe definition of Oligopoly and Natural monopoly- Oligopoly- Natural monopolyBarriers to entry- Natural Barriers occurred by Economies of Scale- Legal Barriers- Limit pricing- High set up costs and sunk costsNecessary support from Government's subsidyPrices setting and Profits that are earned-Price Maker-Price Discrimination-Applied for fare increase caused by lost profitsNature of products/servicesContestability- Deregulation- Efficiency- No close substitutesFinding and ConclusionReferencesTable 1, Ferry Passenger Statistics (2007 figures)Table 2, Identify of the market structure betweentwo time-periodsFigure 1, Route Distribution of Local ferry services inHong Kong's Outlying IslandFigure 2, the average total cost curve for a natural monopolyFigure 3, the basis of the natural monopoly,AppendicesAppendix 1 ''16 routes of outlying island''Appendix 2 ''Passengers per day in the six re-tendering routes''Appendix 3 ''The expectation of population growth in Outlying Island at 2007-2016 ''Appendix 4 '' Legislative Council Panel on Transport on 26 March 1999Transitional Arrangements for the Outlying Island, New Town and Inner-Harbors Ferry Services.''''IntroductionHong
Kong is well-known for its comprehensive public transport system, with different modes of transportation, including railway, licensed bus, non-licensed bus, mini bus, taxi, and ferry. The Government believes the existing transportation policy which could maintain the connection of various public transport, coordinating every mean of transportation, and make sure that all kinds of transportation can sustain in its.
Local Ferry Services is one of essential for the Hong Kong transportation. It was the main transportation vehicle in early days which connected Hong Kong Island and Kowloon crossing the Victoria Harbor. Although its importance reduces greatly nowadays, it was still the main transportation vehicle in connection of the urban area and the outlying island.
Starting from 1 April 1999, most of the ferry services are provided by licensed ferry operators. There are now...