External Influences - Competetors And Market Types

Question 1

Define competition

Answer 1

Competition is rivalry among sellers

Question 2

Define what a market is

Answer 2

A market is any situation where buyers and sellers are in contact to establish a price

Question 3

Define market price

Answer 3

Although there is no market price in the single price for a product, where is a price range in a market at which consumers are willing to pay

Question 4

Define mark up

Answer 4

Mark up is the difference between the cost to produce the item and the price at which the item is sold

Question 5

Name 2 characteristics of a competitive market

Answer 5

1. Many firms

2. Compete on best price

Question 6

Name 2 characteristics of a monopoly

Answer 6

1. Dominated by one firm (over 25% market share)

2. High prices

Question 7

Name 2 characteristics of monopolistic competition

Answer 7

1. Many firms

2. Compete on. On-price differences

Question 8

Name 2 characteristics of an oligopoly

Answer 8

1. Market dominated by few firms

2. Similar high prices

Question 9

Define collusion

Answer 9

Collusion is where firms will communicate for mutual benefit

Question 10

What does collusion do

Answer 10

Prevents fair competition