Final Things To Lesrn Flashcards
Perfect competition characteristics
Large number of small firms Homogenous products No barriers to entry or exit Perfect information Firms are price takers
Characteristics of monopolistic comp
Large number of small firms Similar products Low barriers Imperfect info Limited influence over prices
Oligopoly
Small number of big firms Product differentiation High barriers Imperfect comp Considerable influence over price
Foward/ backward integration cons
May lead to inefficiency
Limits competition
Foward/ backward integration pros
More control over suppliers
Efficiency
More control over industry
Horizontal integration cons
May lead to inefficiency
Differences in the running of the 2 firms may cause some issues may cause
Horizontal integration pros
Greater growth due to limited comp
Efficiency
More market share
Conglomerate cons
May lead to inefficiency
May lack expertise in the production of some goods
Conglomerate pros
Less risk due to diversification
Demergers cons
Businesses
May lead to inefficiency
Firms can raise funds
Demergers pros
Businesses
Become more efficient
May get higher profit margin
Demergers cons
Workers
Lower wages as comp increases
Demergers pros
Workers
Greater job security as loss making parts of the business are removed
Demergers cons
Consumers
Greater comp leads to lower prices
Smaller businesses may mean better customer service
More choice for consumers
