7 ~ Market Structure

Tara Pugal
Flashcards by Tara Pugal, updated more than 1 year ago
Tara Pugal
Created by Tara Pugal almost 5 years ago
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AS - Level Economics (Microeconomics) Flashcards on 7 ~ Market Structure, created by Tara Pugal on 04/24/2016.

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Question Answer
Describe a competitive market (5) many sellers, none have dominant market share sellers producer slightly diff products (so high XED) customer loyalty is fairly weak each seller has good access to new tech customers+producers have full info
The more competitive a market... the more allocatively efficient is it
What are monopoly's? firms that have more than 25% of market share
What is an oligopolistic industry? where a few dominant firms together have 50% of market share
How do monopolies develop? from the successful organic (internal growth) of a business through mergers and acquisitions (the integration of firms)
What is the internal expansion of a business? when a firm increases generates higher sales and increased market share by exploiting economies of scale
What are barriers to entry? the ways that potential competitors are blocked so that monopoly's can enjoy higher profits in the LR
What are 3 examples of barriers to entry? patents advertising and marketing brand proliferation
What are patents? legal property rights
How do advertising an marketing act as barriers to entry? they develop customer loyalty
How does brand proliferation act as a barrier to entry? in many industries, multi-product firms engaging in brand proliferation can give a false appearance of competition
How does monopoly power = market failure? a monopoly makes higher profits at the expense of a loss of allocative efficiency
What are the 3 potential benefits of monopoly? research and development spending exploitation of economies of scale monopolies and international competitiveness
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