10 Market Structures Flashcards
audience that you intend to buy your product
target market
bridge the gap between the product and the target market
marketing department
location where consumers purchase a producer’s roducts
supermarket
mechanism/arrangement where buyers and sellers interact (exchange goods)
market
decide price and quantity; both buyers and sellers must agree
market
no single seller/buyer can have significant effect
perfect competition
you take whatever the market price is
price taker
products are identical, homogeneous, fully substitutable
perfect competition
no constraints in entering/exiting the market, because there are an infinite number of producers
perfect competition
implies that everyone knows everything about the product; there are no opportunities of arbitrage (resellers)
perfect information
intense competition
monopolistic competition
combo of monopoly and perfect competition
monopolistic competition
buyers and sellers can easily enter and exit the market
monopolistic competition
relatively few sellers that are interdependent
oligopoly
very strong barriers to entry and exit
oligopoly
products have few substitutes
oligopoly
group of producers that cooperate instead of compete to seek higher profit and control quantity and price
cartel
any type of illegal conspiracy/intent to defraud customers
collusion
dominant firm makes pricing decision for the rest of the market
price leadership
firms break out of price leadership model and begin undercutting each other’s prices
price wars
firms compete on the basis of product differentiation, not price
product differentiation
only one seller; no competition
monopoly
products have no immediate substitute
monopoly
many barriers involved in entering the market
monopoly
ownership of essential input and supply chain; high cost for capital
structural barriers
monopolist discourages entry of new firms
strategic barriers
franchise, patents, copyright
legal barriers
inventions
patents
intellectual property
copyright
people are forced to buy from you
price maker
