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Y2 economics of business strategy > Market structure and definition and competitor identification > Flashcards

Market structure and definition and competitor identification Flashcards

1
Q

In technological progress, what are the supply conditions?

A
  • Technology and cost structure
  • Factor markets
  • Organizational structure location
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2
Q

In technological progress, what are the demand conditions?

A
  • Tastes and preferences
  • PeD
  • Availability of substitutes
  • Method of purchase
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3
Q

In technological progress, what are the structure conditions?

A
  • Number and size

- Distribution of buyers and sellers

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4
Q

In technological progress, what are the conduct conditions?

A
  • Business objectives
  • Pricing policies
  • Product design/branding
  • Ads/marketing
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5
Q

In technological progress, what are the performance conditions?

A
  • Profitability
  • Growth
  • Quality of products/service
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6
Q

What are categories of government policy?

A
  • Competition policy
  • Regulation
  • Taxes and subsidy
  • Employment and wage policy
  • Price controls
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7
Q

Markets are often described by the degree of:

A

Concentration

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8
Q

What are the two market extremes?

A

Monopoly and perfect competition

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9
Q

What are the characteristics of an imperfectly competitive firm?

A
  • Downward sloping demand curve
  • Output price depends on quantity of goods produced and sold
  • Price maker instead of taker
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10
Q

What are the two imperfect market competition structures?

A
  • Monopolistic competition

- Oligopoly

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11
Q

In monopolistic, what is the source of market power?

A

Differentiation

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12
Q

What is vertical differentiation?

A

Making a product better than products of competitors

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13
Q

What is horizontal differentiation

A

Making a productive distinctive from those of competitors

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14
Q

What’s an example of vertical differentitation?

A

BMW vs Skoda

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15
Q

What’s an example of horizontal differentitation?

A

Coke vs pepsi

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16
Q

In monopolistic competition, price is set above:

A

Marginal cost

17
Q

Under monopolistic competition, the firm will earn:

A

Economic profit

18
Q

Grocery stores attract clientele based on:

A

Location

19
Q

When a new firm enters a monopolistic competition market, the economic profit of current firms is:

A

Reduced

20
Q

What’s the difference with a Cournot equilibrium compared to perfect competition?

A
  • Output is less

- Prices and profits are higher

21
Q

Under a Cournot equilibrium, as the number of firms increases, output:

A

Moves towards perfect competition

22
Q

In a Bertrand duopoly, each firm takes the price set by rivals and:

A

Sets its own profit maximising price

23
Q

What are two market structure measurement definitions?

A
  • N firm concentration ratio

- Herfindahl index

24
Q

What is the n firm concentration ratio?

A

Combined market share of the n largest firms

25
Q

What is the Herfindahl index?

A

Sum of squared market shares of each firm in the industry

26
Q

The Herfindal figure for Perfect competition and monopolistic competition

A

Usually <0.2

27
Q

What is the Herfindahl figure for an Oligopoly?

A

0.2-0.6

28
Q

What is the Herfindahl figure for a Monopoly

A

> 0.6

29
Q

What are the conditions for “fierce competition”

A
  • Market is congestible
  • Perceived homogenous products
  • Excess capacity
30
Q

What is the calculation for the lerner index figure?

A

(P - MC)/P

31
Q

What affects market concentration?

A
  • Scale economies
  • Cost advantages
  • Concentration of buyers
32
Q

What is an entry threshold?

A

Population needed to support a given number of sellers

33
Q

What does En mean?

A

Entry threshold for n sellers

34
Q

One firm’s strategic choice adversely affects the performance of another if:

A

They’re competitors

35
Q

Any firm who produces a substitute product is a:

A

Competitor

36
Q

Two products tend to be close substitues if:

A
  • They have similar performance characteristics
  • They have similar occasion for use
  • They are sold in the same geographic area
37
Q

Performance characteristics describe:

A

What the product does to/for the customer

38
Q

What are some ways to identify competitors?

A
  • CPeD

- Price correlation across time

39
Q

What is the business’s catchment area?

A

Where the customers come from

Y2 economics of business strategy (9 decks)

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