Different Market Structures Flashcards

1
Q

Q: What are the types of market structures in economics?

A

A: Perfect competition, monopolistic competition, oligopoly, monopoly, and natural monopoly.

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2
Q

Q: What is perfect competition?

A

A: A market structure where many small firms sell identical products, there are no barriers to entry or exit, and all firms are price takers.

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3
Q

Q: What characterizes monopolistic competition?

A

A: A market structure with many small firms selling differentiated products with weak barriers to entry and some degree of price control.

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4
Q

Q: What is an oligopoly?

A

A: A market structure dominated by a few large firms, with significant barriers to entry, differentiated products, and interdependent pricing strategies.

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5
Q

Q: What defines a monopoly?

A

A: A market structure with a single firm that controls the entire market, strong barriers to entry, and significant price-making power.

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6
Q

Q: What are the key factors in the structure of listed markets?

A

A: Number of buyers and sellers, product differentiation, degree of freedom of entry, and availability of information.

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7
Q

Q: How does the number of buyers and sellers affect market structure?

A

A: It influences the level of competition and market power of individual firms

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8
Q

Q: What is product differentiation?

A

A: The degree to which products are distinguished from each other through branding, quality, and other features.

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9
Q

Q: Why is the degree of freedom of entry important in market structure?

A

A: It determines how easily new firms can enter or exit the market, affecting competition levels.

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10
Q

Q: How does the availability of information impact market structure?

A

A: It affects the ability of buyers and sellers to make informed decisions, influencing market efficiency.

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11
Q

Q: What are the types of barriers to entry and exit in markets?

A

A: Legal barriers, market barriers, cost barriers, and physical barriers.

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12
Q

Q: What are market barriers?

A

A: Challenges like established brand loyalty and high market concentration that make it difficult for new firms to enter the market.

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13
Q

Q: What are physical barriers?

A

A: Geographical or infrastructural limitations that hinder new firms from entering the market.

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14
Q

Q: What is price competition?

A

A: A form of rivalry where firms compete by lowering prices to attract customers.

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15
Q

Q: What is non-price competition?

A

A: Rivalry based on factors other than price, such as product quality, service, and advertising.

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16
Q

Q: What are the characteristics of perfect competition?

A

A: Many small sellers, homogeneous products, no barriers to entry, price takers, and perfect information.

17
Q

Q: What are the characteristics of monopolistic competition?

A

A: Many small sellers, differentiated products, weak barriers to entry, and some price control.

18
Q

Q: What are the characteristics of an oligopoly?

A

A: Few large firms, differentiated products, significant barriers to entry, interdependent pricing, and non-price competition.

19
Q

Q: What are the characteristics of a monopoly?

A

A: One firm, unique product with no close substitutes, strong barriers to entry, and significant price-making power.

20
Q

Q: What barriers enable firms to maintain monopoly power?

A

A: Ownership of resources, government restrictions (licenses), patents, difficulties in raising capital, and economies of scale.