Flashcards
Economics Unit 1 4.1.5 Market Structures A2
Cards in this deck (11)
- 1What are the 5 different market structures?1. Monopoly
2. Duopoly
3. Oligopoly
4. Monopolistic Competition
5. Perfect Competition - 2The Number of Firms in each market Structure?Pure Monopoly = 1
Oligopoly = 2-7 ish
Monopolistic = Over 8-(15-20)
Perfect Competition = 20+ - 3What is an Entry Barrier?Obstacles that make it difficult for a new firm to enter a market.
- 4What is an Exit Barrier?Obstacles that make it difficult for an established firm to leave a market.
- 5What 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.
- 6What is a Sunk Cost?Costs that have already been incurred and cannot be recovered.
- 7What is an Artificial Barrier?Barriers erected by the firms themselves, such as high levels of advertising expenditure or predatory pricing.
- 8What is limit Prices?Prices set low enough to make it unprofitable for other firms to enter the market.
- 9What is Predatory Prices?Prices set below average cost (or very cheaply) with the aim of forcing rival firms out of business.
- 10Amount 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 - 11What is Product differentiation?The marketing of generally similar products with minor variations or the marketing of a range of different products.