The market, market size and growth Flashcards
What is meant by a market
A place where buyers and sellers can meet in order to facilitate the exchange of goods / services
What is meant by competition
The contest or rivalry between companies selling similar products and/or targeting the same audience to get more sales
What is meant by market size
The total number of potential buyers of a product or service within a given market, and the total revenue that these sales may generate
What is meant by market growth
The change in a markets size over a given period, typically expressed as a positive or a negative percentage
How important is market size to a business
- Businesses are usually likely to use the market size to estimate how much profit they could potentially earn
- size of a market influences diction making
- may also affect barriers to entry
Ways a business can increase its market share
- selling more to existing customers
- focus on the quality of service to maintain customers
- expand the customer base
- sell through new channels
- sell into new markets
What is and are the features of an Oligopoly
- high barriers to entry
- price setting ability
- the interdependence of firms
- maximised revenue
- product differentiation
- non-price competition
What is and are the features of a Monopoly
- no close substitute
- single seller
- 25% + market share is classed as a monopoly by CMA
- usually several buyers
What is and are the features of Monopolistic Competition
- many companies
- each company produces similar but differentiated products
- companies are non-price takers
- free entry / exit to the market
- company’s compete based on price, quality of the products, and how the product is marketed
What is the relationship between the market structure and a business’ decision making power
