Monopolies Flashcards
1
Q
Patent
A
License that grants permission to operate as a sole producer of a newly designed product
2
Q
Monopoly
A
When there is one dominant seller in the market
3
Q
Price maker
A
Where a dominant business is able to set prices charged in the whole market
4
Q
New entrant
A
Company that starts to sell goods or services in a market where they have not sold them before, or one of these goods or services
5
Q
Types of monopolies
A
Pure monopoly - 1 producer supplies a market
Legal monopoly - a firm having minimum 25% of market share
6
Q
Features of a monopoly
A
- Unique products
- Price maker
- Barriers to entry (legal barriers, high start up costs, patents, technology, marketing budget)
7
Q
Advantages of a monopoly
A
- Efficiency
- Innovation
- Economies of scale
8
Q
Disadvantages of a monopoly
A
- Higher prices (for consumers)
- Restricted choice
- Lack of innovation
- Inefficiency
