Competitive environment Flashcards
What is perfect competition?
The type of competition where there are lots of firms in a market competing on an equal basis. Their products are pretty much identical and they all charge similar price.
They need to keep costs low and products good quality.
What is an Oligopoly?
When a small number of large firms dominate the market and charge similar prices. For a business to get ahead they need to focus on marketing and brand image to increase demand, so marketing costs will be high.
What is a monopoly?
Where one business has complete control over it’s market. There is no competition. They can increase prices without worrying about demand falling and marketing costs are low.
Define market size
The number of buyers and sellers within a market.
why do larger markets have high levels of competition?
larger markets have more potential customers which attracts more businesses to them. As more businesses operate in these markets they have more competition.
