Competition and Markets Flashcards
Define competition
Rivalry between sellers
Define market
Where buyers and sellers meet, can be physical or non-physical
Define non-physical
Online or digitally
Why do physical markets still survive?
People like the personalisation of physical markets
Why do people like non-physical markets?
It is convenient
Define market price
A price range which consumers are willing to pay
Define what is meant by a competitive market?
A market which there are a higher number of sellers, competition is based on price
Define a monopoly market
A market dominated by one seller
Define economies of scale
Arise when unit costs fall as output rises
How do you work out unit costs?
Total production costs/ total output
State three characteristics of a monopoly market
High prices, dominated by one seller, limited choice/ no choice, high barriers to entry
Define what is meant by oligopoly
A market is dominated by a few firms
State three characteristics of an oligopoly
Not very competitive, a diluted version of monopoly, high barriers to entry, similar sellers, high prices, compete on non price differences
Define collusion
When rival firms cooperate for their mutual benefit
Define market size
Collective value of goods/ services that buyers purchase in a particular market
Define market growth
The percentage change in the size of a market
Define market size
The percentage of total sales a business has in a specified market
State three characteristics of a competitive market
Many sellers, competition on price, low barriers to entry
Define monopolistic competition
A market with many sellers who sell slightly differentiated products
State three characteristics of monopolistic competition
Non price differences, many sellers, similar products
Define barriers to entry/ exit
The factors which prevent a business from entering/ exiting a market
Why may a firm want to enter a market ?
To make profit, to differentiate from other products in the market, they found a gap in the market
Define market dominance
A measure of a market share compared to competitors
Define market power
The ability of a firm to influence or control the terms or conditions on which goods are sold and brought
