Different Market Structures Flashcards
Q: What are the types of market structures in economics?
A: Perfect competition, monopolistic competition, oligopoly, monopoly, and natural monopoly.
Q: What is perfect competition?
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.
Q: What characterizes monopolistic competition?
A: A market structure with many small firms selling differentiated products with weak barriers to entry and some degree of price control.
Q: What is an oligopoly?
A: A market structure dominated by a few large firms, with significant barriers to entry, differentiated products, and interdependent pricing strategies.
Q: What defines a monopoly?
A: A market structure with a single firm that controls the entire market, strong barriers to entry, and significant price-making power.
Q: What are the key factors in the structure of listed markets?
A: Number of buyers and sellers, product differentiation, degree of freedom of entry, and availability of information.
Q: How does the number of buyers and sellers affect market structure?
A: It influences the level of competition and market power of individual firms
Q: What is product differentiation?
A: The degree to which products are distinguished from each other through branding, quality, and other features.
Q: Why is the degree of freedom of entry important in market structure?
A: It determines how easily new firms can enter or exit the market, affecting competition levels.
Q: How does the availability of information impact market structure?
A: It affects the ability of buyers and sellers to make informed decisions, influencing market efficiency.
Q: What are the types of barriers to entry and exit in markets?
A: Legal barriers, market barriers, cost barriers, and physical barriers.
Q: What are market barriers?
A: Challenges like established brand loyalty and high market concentration that make it difficult for new firms to enter the market.
Q: What are physical barriers?
A: Geographical or infrastructural limitations that hinder new firms from entering the market.
Q: What is price competition?
A: A form of rivalry where firms compete by lowering prices to attract customers.
Q: What is non-price competition?
A: Rivalry based on factors other than price, such as product quality, service, and advertising.
