External Inlences- Types Of Market Flashcards
What is a competitive market?
A market in which there are large numbers of sellers. Businesses in these markets compete mainly upon price.
What is a monopoly?
Any firm that has more than 25% of the industries sales.
What is an oligopoly?
A market dominated by a few sellers. Exists where a market is dominated by a few firms. e.g. mobile carrier market.
What is mark-up?
The difference between the sale price and cost of production.
What is revenue?
The gross amount of money coming into a business, essentially sales.
What is a collusion?
Where companies co-operate for their mutual benefit. Two or more parties act together to influence production or price levels, this prevents fair competition.
What is monopolistic competition?
A market structure with many competing firms each of whom supplies slightly different products.
What is market size?
The collective value of goods/services that buyers purchase.
What is market growth?
The percentage change in the size of the market, measured over a specific period.
How do you work out percentage change?
Difference
————- x 100
Original
What is market share?
The percentage of the total sales that a has in a specific market.
Define barriers to entry
A factor that could prevent a firm from entering and competing in a market
What are the 5 main barriers to entry?
- Large start-up cost. These will mainly be capital costs like machinery
- Having the marketing budget to break customer loyalty
- The inability to gain economies of scale
- The possibility that existing businesses will start a price war
- Legal restrictions such as patents
Define barriers to exit.
The factors that could prevent a firm from leaving a market, even if it wanted to. Most businesses will chose to leave a market because it is no longer financially viable.
What are the 3 main barriers to exit?
- Sell capital off. e.g. Stores, Warehouses, Stock
- Make staff redundant, high costs
- Break the contract with suppliers
