Flashcards
Week 20 - Monopolies
Cards in this deck (5)
- 1What is a monopoly?A type of market that exists when 1 seller/supplier dominates the market and as a result there is an ebsence on competition
- 2What are 3 types of monopoliesPure monopoly: Exists when a single firm has full control over the production and sale of a product/service
Legal monopoly: Exists when a single fim is granted rights by the government to produce and distribute certain goods/services
Local monopoly: Exists when a 1 firm dominates a specific geographical area - 3State 5 features of monopolies- Price makers
- High entry barriers
- 1 firm dominates
- Unique products with no substitutes
- Limited consumer choice - 4State 2 advantages of monopolies- Economies of scale: As firms are able to produce more for cheaper, consumer prices are lower
- Innovation: Large firms have the money to invest in R & D. This will allow them to develop new tech and products, benefiting consumers - 5State 2 disadvantages of monopolies- Higher prices: Firms facing little to no competition can afford to charge higher prices from consumers
- Low efficiency: No competition leads to firms working more slowley and not putting as much efforts into production
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- Economics Flashcards on Week 20 - Monopolies, created by Stacey R on 19/04/2024.
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- Stacey R
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