Ideas To Revise

Question 0

Non-price competition

Answer 0

Trying to win business from rivals other than by charging a lower PRICE. Methods include ADVERTISING, slightly differentiating your product, improving its quality, or offering free gifts or discounts on subsequent purchases.

Question 1

Competition

Answer 1

The more competition there is, the more likely are FIRMS to be efficient and PRICES to be low. Economists have identified several different sorts of competition. PERFECT COMPETITION is the most competitive market imaginable in which everybody is a price taker.

Question 2

Branding

Answer 2

Many economists regard brands as a good thing, however. A brand provides a guarantee of reliability and quality. Consumer trust is the basis of all brand values.

Question 3

Branding

Answer 3

The name or symbol associated with a product or service. Brands add value and increase loyalty.

Question 4

Barriers to entry

Answer 4

Anything that prevents firms from entering the industry.

Question 5

Economies of scale

Answer 5

A reduction in average costs brought about by an increase in the size of a business.

Question 6

Minimum efficient scale

Answer 6

The lowest point of the long run average cost curve where average costs are minimised and technical efficiency is achieved.

Question 7

Monopoly

Answer 7

Where there is only one business in the market. No competition.

Question 8

Oligopoly

Answer 8

Where several large firms dominate the industry and compete against each other.

Question 9

Monopsony

Answer 9

When there is only one buyer of a product or service.

Question 10

Capital intensive production

Answer 10

Uses lots of capital and little labour.