markets

Question 1

what is a market

Answer 1

any place where potential buyers and sellers interact to carry out a transaction. this means that the seller offers a good or service to the buyer in exchange for a particular value

Question 2

what is the remuneration for the factors of production

Answer 2

Capital - interest
Raw materials - rent
Labour - wages and salaries
Entrepreneurship - profit

Question 3

what are the 3 types of markets

Answer 3

• labour
• financial
• raw materials

Question 4

what are intangible services

Answer 4

services that are rendered to earn money such as doctors, lawyers and teachers

Question 5

what are physical goods

Answer 5

goods that we can touch such as cars, food and clothes

Question 6

how can markets be classified

Answer 6

1) place
2) time
3) legal vs illegal
4) competition

Question 7

give a description of legal vs. illegal business

Answer 7

whether a business offers goods and/or services that break the laws of the country.

Question 8

how can a business be classified in place

Answer 8

is where the business operates

Question 9

describe a short term business

Answer 9

when a business enters the market for a short period of time [6 months]

Question 10

describe an international market

Question 11

what are the principles for perfect competition

Answer 11

• impact on competitors
• homogenous
• no price difference
• significant barriers

Question 12

what are 3 markets that have perfect competition

Answer 12

1) foreign exchange market
2) agriculture markets
3) internet markets

Question 13

what are the imperfect competitions

Answer 13

1) monopoly
2) oligopoly
3) monopolistic

Question 14

what is the difference between a monopoly and oligopoly

Answer 14

a monopoly is when only one business produces or sells a particular product or service and an oligopoly is when a market where there is a large number of competitors but the market is dominated by a few big businesses.

Question 15

how can we prevent a monopoly from forming

Answer 15

• economic scale
• a patent
• large sums of money
• government legislations

Question 16

what are the problems associated a market

Answer 16

• the high price
• the quality of the product
• forcing the supplier

Question 17

what is monopolistic competition

Answer 17

a system where there are a large number of sellers in the market, offering similar, but not identical goods and services.

Question 18

why are there significant barriers with monopolistic competition

Answer 18

to differentiate themselves and their products or services

Question 19

what can we look at when we differentiate products in a monopolistic market?

Answer 19

• the locations
• the branding
• the design, colour, shape or material
• the packaging
• the service levels
• the distribution
• the marketing gimmicks