Market Sturture Chapter 15

Question 1

What is Market Structure?

Answer 1

Is a type of competition that exist in an industry

Question 2

What are the difference types of market structure?

Answer 2

~Perfect competition
~ Monopoly
~ Oligopoly
~ Monopolies Competition

Question 3

What are the Characteristics/features in a Perfect competition?

Answer 3

Many buyer
Many sellers
Freedom of entry and exit
Homogenous product( identical product)
Fixed price
Perfect information and knowledge
Normal profit

Question 4

What happens in a Short Run?

Answer 4

The number of business in an industry is fixed as new businesses cannot enter the market nor can existing business

Question 5

What are the Characteristics/features in a Monopoly?

Answer 5

One firms dominates the market
Barriers to entry
Supernormal profit

Question 6

What are the Disadvantages of a Monopoly?

Answer 6

Higher Price
Supernormal profit
Lack of choice
No motive to reduce costs
Productive inefficiency
Diseconomies of scale

Question 7

What is an Oligopoly?

Answer 7

Is when there are a few large producer that supply a particular market

Question 8

What are the characteristics/features in a Oligopoly?

Answer 8

~ Dominated by a few large frims
~ Independent of business
~ Barriers to entry(like brand loyalty)
~ Differentiated products

Question 9

What are the characteristics/features in a Monopolistic competition?

Answer 9

~ Many firms
~ Freedom of entry and exist
~ Differentiated product
~ Normal profit in long run
~ Supernormal profit in short run
~ Inelastic demand

Question 10

What are Barriers to entry?

Answer 10

Is when there are restrictions that prevent other firms from entering an industry that in the long run