Markets Flashcards
What are the three elements of a market?
-Producer -Consumer -Items of exchange
What are the two types of markets?
Product and Factor Markets.
What is a product market?
Product markets host buying and selling of G&S. The consumer is the demand, and the firm is the supply.
What is a factor market?
Deals with buying and selling of the factors of production such as labor, Firms demand and consumer supply this.
What is a competitive market, what are the 4 main features and what size is a business in a competitive market usually?
Have lots of buyers and sellers, Firms are price takers - meaning that they must take or accept whatever price the markets set, Sell similar (homogenous) goods. Easy entry into the market (no barriers to entry or exit)
-Small firms and businesses
What is a Non-Competitive Market, what are the 5 main features?
A small number of firms, Firms are price setters, they have market power, they have product differentiation - their products are “different” in the consumers eyes, Entry into the market is restricted.
What is it called when there is only 1 major firm in a market, 2; a few?
1 - Monopoly 2 - Duopoly Few - Oligopoly
