Market Structures Flashcards
What is a market?
A place where buyers and sellers meet and trades goods and services with each other.
What are the types of markets?
- LOcal markets
- Global markets
- Seasonal markets
- Mass markets
Niche markets
Trade markets
Consumer markets
What is a local market?
When customers only travel a short distance to purchase goods and services from sellers.
What is an advantage to consumers of a local market?
- Easy to get to
- Business satisfy needs (as they know what consumers want)
What is an advantage to businesses of a local market?
- Loyal customers/frequent customers
- Familiar with customers —-> better satisfy needs
What is a disadvantage to consumers of local markets?
- Premium prices (as convenient and less comp)
- Limited choice
What is a disadvantage to businesses of a local market?
Limited amount of customers
Dependent of local people
What is a global market?
Where goods and services are offered for sale by businesses across different countries
What is a seasonal market?
Sales are concentrated in a particular part of the year
Examples of seasonal products
Christmas trees, swimsuits, Easter eggs, ice cream, sun cream etc
What is competition?
When two or more sellers of similar goods and services act independently to persuade buyers to choose their products
What is a mass market?
Products that are targeted at the whole market
What is a niche market?
Subsections of mass markets where products are targeted at specialised market segments
What are consumer markets?
Sell products directly to their consumers (B2C sales)
What is a trade markets?
Sell products to other businesses (B2B sales)
How many sellers are there in a monopoly?
One
What is the seller concentration in a monopoly?
Very high
What is a product differentiation like in a monopoly?
No close substitutes available
What are the barriers to entry like in a monopoly?
Impossible entry or barred
What is the pricing power like in a monopoly?
Price maker - constrained by demand curve and possible regulation
What is the non-price competition like in a monopoly?
Not needed therefore large firms are able to afford to undertake costly research and development
What is an example of a monopoly?
Local utilities - (people who supply gas, water, electric)
How many independent sellers are in an oligopoly?
Few
What is the seller concentration like in an oligopoly?
Medium or high
