Market Structures Flashcards
What is a Market?
Any situation where buyers and sellers are in contact in order to establish a price
What is Competition?
A rivalry between sellers
What is a Competitive Market?
A market in which there are a large number of sellers. Businesses in these markets compete mainly upon price.
What is a Monopoly?
A market dominated by one seller. (need 25% market share to be a monopoly)
What is Economies of Scale?
Economies of Scale arise when unit cost fall as output rises.
How are Unit Costs (average costs per unit) calculated?
Total production costs in period (£) divided by Total output in period (units)
What is an Oligopoly?
An Oligopoly exists where a market is dominated by a few firms. The mobile phone market is an example of an Oligopoly.
What is Monopolistic Competition?
A market structure with many competing firms each of whom supplies a slightly differentiated product.
What is Market Size?
Market Size is expressed as the collective value of the goods/services that buyers purchase.
What is Market Growth?
Market Growth is the percentage change in the size of the market, measured over a specific period.
What is Market Share?
The percentage of total sales (by value) that a business has in a specified market.
What is Market Power?
The ability of a firm to influence or control the terms and conditions of which goods are bought and sold.
What is Market Dominance?
A measure of market share compared to competitors.
What are Barriers to Entry?
The factors that could prevent a firm from entering and competing in a market.
What is a Merger?
This is where two companies join together to form a new larger business.
