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Description
Flashcards by Ryan Finch, updated more than 1 year ago
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Created by Ryan Finch
over 2 years ago
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| Question | Answer |
| What are the 5 different market structures? | 1. Monopoly 2. Duopoly 3. Oligopoly 4. Monopolistic Competition 5. Perfect Competition |
| The Number of Firms in each market Structure? | Pure Monopoly = 1 Oligopoly = 2-7 ish Monopolistic = Over 8-(15-20) Perfect Competition = 20+ |
| What is an Entry Barrier? | Obstacles that make it difficult for a new firm to enter a market. |
| What is an Exit Barrier? | Obstacles that make it difficult for an established firm to leave a market. |
| What is a Natural Barrier? | Barriers that result from inherent features of the industry, such as economies of scale or high research and development costs; not barriers that have been erected artificially. |
| What is a Sunk Cost? | Costs that have already been incurred and cannot be recovered. |
| What is an Artificial Barrier? | Barriers erected by the firms themselves, such as high levels of advertising expenditure or predatory pricing. |
| What is limit Prices? | Prices set low enough to make it unprofitable for other firms to enter the market. |
| What is Predatory Prices? | Prices set below average cost (or very cheaply) with the aim of forcing rival firms out of business. |
| Amount of product differentiation in each market structure? | Pure Monopoly = All the same/a small amount of difference Oligopoly = Very Different Monopolistic = A bit of a difference Perfect= All the same |
| What is Product differentiation? | The marketing of generally similar products with minor variations or the marketing of a range of different products. |
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