Types of Markets

Question 1

what is a product market

Answer 1

deal with buying and selling of goods and services

consumers (demand side) by g+s produced by firms (supply side)

Question 2

what is a factor market

Answer 2

deal with buying and selling for things that make products like labour, capital, natural
consumer (supply side) sell their resources to firms (demand side)

Question 3

what are the 4 things that make a competetive market

Answer 3

1. large number of buyers/sellers who determine price
2. firms are pricetakers, they must take the price established by the market
3. they all sell very similar products (lots of small businesses selling same stuff)
4. easy entry into this market

Question 4

what are the 4 things that make a non competetive or imperfect market

Answer 4

1. small number of firms
2. product differentiation (products are to look different)
3. price setters (they have market power and set their own price)
4. hard for new firms to enter