the market - market size and growth

Question 1

what is a Market?

Answer 1

a market is where buyers and sellers come together to and come to an agreement on a price for a certain good or service.

Question 2

what two types of markets are there?

Answer 2

physical and non-physica;

Question 3

what is meant by a physical market?

Answer 3

when a consumer is in direct contact with the seller of a good or service.

Question 4

?what is a non-physical market

Answer 4

when there is no interaction between a seller and buyer. e.g. through online purchasing.

Question 5

what types of market structure exist?

Answer 5

• competitive markets
• monopoly markets
• monopolistic competition markets
• and oligopoly markets

Question 6

what is a competitive market?

Answer 6

• a market structure where there are a large number of firms producing similar products or services
• who are all competing to meet the needs of a large number of customers.
• these firms have to accept the price in the market
• have little to 0 power within the market
• customers are elastic so its difficult for anyone to change the price.

Question 7

what is meant by a monopoly?

Answer 7

• controlled by a single business
• has lots of control over the market as they are the only supplier of the good or serivice e.g. seventrent.
• price makers
• large barriers to entry and exit

Question 8

why might it not be fair on the customers if they are exposed to monopolist firms?

Answer 8

• lack of variety/choice
• they aren’t acting in the interest of the supplier
• likely to have raised prices

Question 9

what organisation looks to prevent companies getting too big and dictating the market?

Answer 9

• CMA competetion and marketing authorities

Question 10

how is a monoploy defined?

Answer 10

a business that has 25% or more of the market.

Question 11

what is monopolistic competetion

Answer 11

• in some respects this is similar to a competitive market.
• there are a large number of businesses
• large number of consumers
• the products are essentially very similar
• each firm has a monopoly of their brand name.

Question 12

what is an example of a monopolistic competetion firm?

Answer 12

the fast food industry.

Question 13

what is an oligopoly?

Answer 13

when a market has a few large firms

• there may be a few smaller businesses however they follow the leaders
• some suggests that oligopolist collude with each other to decide on prices this behaviour is illegal.