2.5.3 - competitive environment

Question 1

Barriers to entry

Answer 1

Factors which make it difficult or impossible for businesses to enter a market and compete with existing producers.

Question 2

Cartel

Answer 2

A group of businesses or countries which join together to agree on pricing and output in a market in an attempt to gain higher profits at the expense of customers.

Question 3

Colluding

Answer 3

In business, where several businesses or countries make agreements among themselves which benefit them at the expense of either rival businesses or customers.

Question 4

Market structures

Answer 4

The characteristics of a market, such as the size of the barriers to entry to the market, the number of businesses in the market or whether they produce identical products, which determine the behaviour of businesses within a market.