imperfect competition

Question 1

what is imperfect competition

Answer 1

when firms have more control over prices

Question 2

examples of imperfect competition

Answer 2

monopolistic competition , oligopoly

Question 3

demand curve in imperfect competition

Answer 3

demand curve slopes downwards because the firm must lower prices to sell more units

Question 4

types of market structures

Answer 4

1. perfect competition
2. imperfect competition
3. monopoly

Question 5

what is monopolistic competition

Answer 5

many producers with differences in products. it’s common in retail and personal computers. they have more control over prices

Question 6

what is oligopoly

Answer 6

few producers with similar products. found in industries like steel or cars. come control over prices but firm reacts to competitor prices

Question 7

what is monopoly

Answer 7

only one producer with no close substitutes. like water and electricity. they have strong control over price

Question 8

how to calculate mr

Answer 8

change in revenue over change in quantity or gain minus loss

Question 9

how to calculate mr

Answer 9

change in revenue over change in quantity or gain minus loss

Question 10

how to calculate loss

Answer 10

old price-new price times previous unit

Question 11

how to calculate mr for gain loss analysis

Answer 11

gain from additional unit- loss for price reduction

Question 12

primary causes of market imperfections

Answer 12

1. economies of scale and decreasing costs
2. barriers to entry

Question 13

how is eos a cause of imperfect

Answer 13

large firms gain eos over smaller firms so they can cell firms at a lower price pushing smaller firms out of the market

Question 14

how are barriers to entry causing imperfect

Answer 14

they prevent new firms from entering the market so this protects existing firms from new competitors which reduces competition

Question 15

example of barriers to entry

Answer 15

1. legal restrictions
2. high cost of entry