external influences - the market, market size and growth Flashcards
explain what is meant by a market
any place where buyers and sellers can meet
explain what is meant by competitive market
a market in which there are a large number of sellers – they compete mainly on price
what is a monopoly?
a market dominated by one seller
what is the CMA’s definition of a monopoly?
a pure monopoly is when a business dominates 100% of its market. in reality, the CMA describe it as any firm with more than 25% of the industry’s sales
what is an oligopoly?
exists where a market is dominated by a few large firms (e.g. mobile phone networks, airlines, smart phone brands)
describe some of the features of an oligopoly
- the products and prices are very similar
- business may need to compete on non-price differences
for a competitive market, what is the number of firms like?
lots of firms
for a competitive market, what are the prices like?
low
for a monopoly market, what is the number of firms like?
one
for a monopoly market, what are the prices like?
high
give an example of a competitive market
farming
give an example of an monopolistic market
pure gym market share of 34%
describe the key features of an oligopoly (number, price)
few firms, high and similar prices
example: airlines
define monopolistic competition
a market structure with many competing firms each of whom supplies a slightly differentiated product
what do some oligopolists do?
collude which means they secretly agree on something. this includes keeping prices higher than if the market was competitive
this may force other firms out of market
