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
