Competition Flashcards
What is perfect competition?
Perfect competition is a market structure where many buyers and sellers trade identical products, and no single participant can influence the market price.
What are the characteristics of perfect competition?
Large number of buyers and sellers, identical products, easy entry and exit, and perfect knowledge of market conditions.
What is monopolistic competition?
Monopolistic competition is a market structure where many firms sell similar but differentiated products, allowing some control over prices.
What is an oligopoly?
Oligopoly is a market structure dominated by a few large firms, which may engage in cooperation or competition.
What is monopoly?
Monopoly is a market structure where a single firm controls the entire market, setting prices and output levels without competition.
What are barriers to entry?
Barriers to entry are obstacles that prevent new firms from entering a market, such as high startup costs or strong brand loyalty.
What is price competition?
Price competition occurs when businesses compete by lowering prices to attract customers, often seen in perfect competition.
What is non-price competition?
Non-price competition involves businesses competing through product differentiation, advertising, customer service, or other factors rather than price.
What is the role of consumer choice in competitive markets?
Consumer choice drives competition by encouraging firms to improve quality, reduce prices, and innovate to attract buyers.
How does market competition benefit consumers?
Competition benefits consumers through lower prices, higher quality products, more options, and innovation.
