Markets and competition

Question 1

what is a market

Answer 1

A link between seller and buyer

Question 2

Market share

Answer 2

Is the percentage of total sales in a industry generated by a particular company

Question 2

what’s competition

Answer 2

A rivalry amongst sellers to gain more

Question 3

market price

Answer 3

price range that consumers are prepared to buy with

Question 4

monopoly

Answer 4

A market dominated by one seller A firm with 25% of the industry’s sales

Question 5

A dominant monopoly is

Answer 5

40%

Question 6

Economies of sale

Answer 6

the cost per unit of production decreases as volume of product increases

Question 7

Collusion

Answer 7

Where 2 rival companies co-operate for their mutual benefit this prevents competition this in common in oligopoly’s

Question 8

Market size

Answer 8

is expressed as the collective value of the goods/services that buyers purchase

Question 9

market growth

Answer 9

is the percentage change in the size of the market, measured over a specific period

Question 10

oligopoly

Answer 10

as few firms in a dominant market
has some firms ability to control price
has many barriers to entry
some differences in product differentiation
examples mobile phone networks company’s

Question 11

Monopoly (pure)

Answer 11

there’s 1 firm in the market
there’s limited ability to control price
subject to government regulation to barriers to entry
there’s no products that compete directly
examples are utilities such as gas

Question 12

competitive market

Answer 12

large number of firms
no ability to control as they complete on price
none to minimal barriers to entry
very little product differentiation
examples are farms and dairy

Question 13

monopolistic competition

Answer 13

many sellers
limited ability to control price
few barriers to entry
emphasis in showing perceived differences in products
examples are retail, clothing and fast food

Question 14

market power

Answer 14

the ability of a firm to influence or control the terms and conditions on which goods are brought are sold

Question 15

market dominance

Answer 15

A measure of market share compared to competitors

Question 15

Barriers to entry

Answer 15

the factors that could prevent a firm from entering and competing in a market

Question 16

Barriers to exit

Answer 16

the factors that could prevent a firm from leaving a market even if it wanted to

Question 17

Examples of barriers to exit

Answer 17

1.Difficulty of selling off capital
2.high redundancy costs
3.contracts with supplies
4. leashes with landlords

Question 18

Merger

Answer 18

this is where two or companies join together to form a new larger business

Question 19

Takeover

Answer 19

this is where control of another company is achieved by buying a majority of its shares

Question 20

CMA

Answer 20

competition and market authority

Question 21

What is the cma

Answer 21

the cma is there to make sure the market share doesn’t get too high and can stop mergers and takeovers happen

Question 22

Demand

Answer 22

the amount of a good/service that customers are willing and able to buy at any given point

Question 23

supply

Answer 23

the amount of a good/service that sellers are willing to sell at any given point