Chapter 13, The market (Physical and non Physical)

Question 1

A market

Answer 1

any situation where the buyers and the sellers are in contact in order to establish a price

Question 2

Competitive Market

Answer 2

• Large number of firms
• Similar products
• a large number of consumers
• difficult to raise the price
• low market shares

Question 3

Monopoly

Answer 3

• Controlled by a single firm
• can charge any price
• UK law: 25% market share

Question 4

Monopolistic competition

Answer 4

• a large number of businesses
• a large number of consumers
• similar products
• lots of non-price competition

Question 5

Oligopoly

Answer 5

• dominated by a few large firms

- sometimes collude to keep prices high but its illegal

Question 6

Market Size

Answer 6

number of individuals in a certain market who are potential buyers or sellers of a product or service

Question 7

Market Growth

Answer 7

increase in demand for a businesses products over a period of time

Question 8

Barriers to entry

Answer 8

• Large start-up costs
• having small marketing budgets
• legal restrictions
• inability to gain economies of scale
• possibility of price war with existing firms

Question 9

Barriers to exit

Answer 9

• selling off expensive plants and machinery
• High redundancy costs
• Contracts with suppliers