Aggregate Demand and Supply

The latest results from the grocery retail sector have seen a substantial rise in profit for Tesco, as food prices appear to be coming down faster than prices. You would expect this, but the extent to which profits have risen might also hint at collusion within the sector, a function of the oligopolistic nature of the market structure. 

Tesco will argue that they face tough competition from the discounters, and that they've lowered the price of 4,000 products, but that assumes that an established supermarket and a discounter are substitutes for all customers and, to be honest, 4,000 goods doesn't represent a significant proportion of all the goods Tesco sells. 

More price rises in the energy sector - with EDF further increasing dual fuel prices, after an April rise. The company suggests that a 13% increase in wholesale prices are to blame - but I wonder whether energy prices will fall in line with wholesale prices in the months ahead.

A nice article looking at the nature of the fuel market: supermarkets are cutting prices, in response to a fall in wholesale prices. Thus, you could look at the ways in which falling costs affect the equilibrium price of petrol.

However, the article also notes that many commentators are quick to point out that the price of fuel could have fallen quicker - suggesting that the supermarkets have a degree of market power in the market - allowing you to consider whether it's an oligopoly and the possibility that it's best described by the kinked demand curve. 

Trouble in paradise - OPEC is struggling to agree new production quotas, and this might threaten stability in the global oil market.