perfect, monopolistic,oligopoly, monoply competition Flashcards
anti competitive behaviour
business strategies employed to deliberately limit contesabillity within markets
cartel
formed by a group of producers when they illegally decide to collude and not compete
A collusive agreement around. Group of oligopoly firms to fix prices and or output between them selves
collision
illegal cooperation between multiple firms forming a cartel
concentrated market
a market with very few firms
concentration ratio
the total market share of leading firms in an industry, these firms output as a percentage of total output
contestability
ease in which consumers can enter a market
consumer surplus
difference between price consumers are willing to pay and the price they actually pay
deadweight loss
loss of social welfare derived from economic activity
de merger
when a firm sells parts of its business to create separate smaller firms
duopoly
any market that is dominated by 2 organisations
Dynamic efficiency
Improvements to efficiency in the long run, bought about by investment in to R and D
Entry/ exit barrier
Making it difficult for firms to enter/ leave the market
Game theory
Where there are two or more interacting decision markers and different decisions lead to differing outcomes
Imperfect competition
Any market structure between external,eyes of perfect competition and a pure monopoly
Innovation
Improving up on an existing product/ process
Interdependence
When the actions of one firms influence the actions of other firms in the market
How firms in competitive oligopoly are affected by rival firms pricing and output decisions
Invention
Creation of a new product/ process
Kinked demand curve
Assume a a business may face a dual demand curve for its profit based on the oligopoly market structure
Limit pricing
Lowering the price of a good or service a round AC creating an artificial barrier to entry
Monopoly
Market with only one supplier / dominant firm
Monopoly power
The ability of a firms to by a price marker rather that a price taker, ability to set prices
Oligopoly
Market dominated by few firms
Patent
Government legislation protecting a firms right to be the some producer of a good
Price leadership
The dominant firm in the market sets the price and less dominant firm a alter their price accordingly
Price war
Where multiple firms current price a each firm trying to under it its competitors and gain market demand
Price taker
A firm that passively accepts the market price set by forces beyond the firms control
Principle a gent problem
Those in control of a firm (agents) act in their own best interest rather than of the owners ( principals)
Producer surplus
Difference between the provides producers are willing to accept and the prices t they actually accept
Product differentiation
Difference a between multiple similar goods and services
Profit maximisation
When a firm seeks to make the largest positive difference between total revenue and total costs
Pure monopoly
Only one firm dominates the market
Static efficiency
Efficiency in the short run, snapshot of efficiency at. Particular time
Perfect competition
Marketing structure that has a large number of buyers and sellers in hi have perfect in formation about the market, identical products and few if any barriers to entry
Market structure
The number and size if firms within. Market did a particular good or service
Pure monopoly
When only one firm supplies to the market
Divorce of ownership from control
Separation that exists between owners of the from and directives in large public limited companies
Satisficing
Making do with a satisfactory subnormal level of profit
Static efficiency
Efficiency measured at a point in time compromising productive efficiency and allocative effiencency
Monopolistic competition
A firm of I’m perfect competition with a large number of firms producing slightly differeiated products
Oligopoly
A market a structure dominated by a small number of powerful firms
Tacit collusion
A collusive relationship between from a without a t formal agreement having being made
Overt collusion
A collusive relationship between firms involving an open agreement
Prices maker
A firm with the power to set the rulling market price
Barriers to entry
Any feature of a a market that makes it difficult or impossible for more firms to enter
Products differentiation
Using advertising or products design to make a products seem different from those of competitors
Sunk costs
Costs that can not easily be recovered if a firm is unsuccessful in a market and has to exit
X efficiency
The lack of willingness if firm a with monopoly power to control their costs of production
Innovation
New product and production processes that ire developed into marketable services goods /
Natural monopoly
A marker where a single firm can benefit from continuous economies of scale
Price discrimination
Where firms with monopoly power charge different group of consumers different prices for the same product
Price competition
Reducing the price of a good or service to make it more attractive than those of competitors
Non-price competition
Competition on the basis uk product features other than price: quality, advertising after sales service
Contestable market
Market with freedom or-entry exit
Hit and run competition
In contestable markets where new entrants take a share of the SNP and they exit the industry
Hit and run competition
In contestable markets where new entrants take a share of the SNP and they exit the industry
