Competition Flashcards
What are the 3 things the word Market can mean?
The place, Type of product or Customers.
What is a competitive market?
Where there are a large number of producers selling to a large number of consumers.
In a competitive market if a firm charges too much what will consumers do?
Go elsewhere, this forces producers to be efficient.
Lots of competition means that sometimes all firms end up making the same product. What does this mean?
That the only competition is over the selling price of the item.
If each firm makes smaller profits…
there may be less money available to develop new and better products.
Does a business that creates a brand new product have competition?
No, it will not have any competition as anyone who wants the product will have to buy it from this business.
If a business sells very specialist products, will it have much competition?
No, because the market won’t be big enough for many businesses to survive.
If it’s difficult for businesses to set up in some markets due to high costs, will it have much competition?
No, because not many businesses will be set up to sell to these markets.
