3.4 Market structures

Question 1

a) Allocative efficiency

Question 2

b) Productive efficiency

Question 3

c) Dynamic efficiency

Question 4

d) X-inefficiency

Question 5

e) Efficiency/inefficiency in different market structures

Question 6

a) Characteristics of perfect competition

Question 7

b) Profit maximising equilibrium in the short run and long
run (perfect competition)

Question 8

c) Diagrammatic analysis (perfect competition)

Question 9

a) Characteristics of monopolistically competitive markets

Question 10

b) Profit maximising equilibrium in the short run and long
run (Monopolistic
competition)

Question 11

c) Diagrammatic analysis (Monopolistic
competition)

Question 12

a) Characteristics of oligopoly

Answer 12

o high barriers to entry and exit
o high concentration ratio
o interdependence of firms
o product differentiation

Question 13

b) Calculation of n-firm concentration ratios and their
significance

Question 14

c) Reasons for collusive and non-collusive behaviour

Question 15

d) Overt and tacit collusion; cartels and price leadership

Answer 15

show diagram

Question 16

e) Simple game theory: the prisoner’s dilemma in a simple
two firm/two outcome model

Question 17

f) Types of price competition:

Answer 17

o price wars
o predatory pricing
o limit pricing

Question 18

g) Types of non-price competition

Question 19

a) Characteristics of monopoly

Question 20

b) Profit maximising equilibrium (monopoly)

Question 21

c) Diagrammatic analysis (monopoly)

Question 22

d) Third degree price discrimination:
o necessary conditions
o diagrammatic analysis
o costs and benefits to consumers and producers

Question 23

e) Costs and benefits of monopoly to firms, consumers,
employees and suppliers

Question 24

f) Natural monopoly

Question 25

a) Characteristics and conditions for a monopsony to operate

Question 26

b) Costs and benefits of a monopsony to firms, consumers, employees and suppliers

Question 27

a) Characteristics of contestable markets

Question 28

b) Implications of contestable markets for the behaviour of firms

Question 29

c) Types of barrier to entry and exit

Question 30

d) Sunk costs and the degree of contestability

Question 31

issues with the kinked demand theory

Answer 31

theory is incomplete as it doesn't explain how and why the oligopolist ended up at the kink emperical evidence doesn't support the theory - rivals dont tend to respond to price changes the way the theory suggests assumes oligopolists behave competitively but they may actually collude

Question 32

Perfect competition (application)

Question 33

perfect competition evaluation

Question 34

perf. comp. +ve and -ve

Question 35

perf. comp. efficiency

Question 36

monop. comp. evaluation

Question 37

monop. comp. application

Question 38

monop. comp. (dis)advantages

Question 39

monop. comp. behaviour of firms

Question 40

monop. comp. efficiency

Question 41

reasons for nonprice vs price competition

Question 42

oligopoly efficiency

Question 43

oligopoly +ve and -ve

Question 44

working vs natural monopoly

Question 45

factors affecting monopoly power

Question 46

causes of a monopoly

Question 47

monopoly vs perfect competition

Question 48

explain monopoly market failure

Question 49

monopoly efficiency

Question 50

monopoly evaluation

Question 51

expl. and diag. first degree price discrimination

Question 52

expl. and diag. second degree price discrimination

Question 53

third degree price discrimination application

Question 54

natural monopoly diagram expl.

Question 55

characteristics of natural monop.

Question 56

benefits and costs natural monop.

Question 57

factors determining AND affecting contestibility

Question 58

impact & significance of contestability

Question 59

contestability efficiency, advantages and disadvantages

Question 60

contestability application

Question 61

contestability evaluation

Question 62

monopsony power

Question 63

min wage in monopsony setting

Question 64

monopsony labour market

Question 65

monopsony application

Question 66

monopsony evaluation

Question 67

monopsony benefits and costs