UNIT 1 AOS 2

Question 1

Perfect competitive market

Answer 1

• Strong comp
• Large number of firms
• No barriers
• Sell homogenous products
• Perfect information
• Consumers = price makers

Question 2

Monopolistic

Answer 2

• Quite strong comp
• Many small firms
• Low barriers
• Differentiated products
• Relatively good information
• Producers are price makers

Question 3

Oligopoly

Answer 3

• Moderate competition
• Few large firms
• High barriers to entry
• Differentiated products
• Controlled by Seller
• Consumers = price takers

Question 4

Monopoly

Answer 4

• 1 seller
• buy or not buy = consumer
• consumer = price takers
• cannot entry
• 1 product

Question 5

Dominos for shifting

Answer 5

1. Impact
2. Shift
3. Original (shortage/surplus)
4. Price
5. Signals
6. get to e2

Question 6

Relative prices

the def

Answer 6

Definition: the price of one good or service compared to another in any given market.

Question 7

Relative prices increase

what happends when RP increase

Answer 7

Relative prices increase
1. Signals to produce more.
2. More profitable
3. Incentive
4. Greater production
5. Greater access to G+S

Question 8

Relative prices decrease

what happends when realtive prices decrease

Answer 8

Relative prices decrease
1. Signals to produce less
2. Less profitable
3. Incentive
4. Less production
5. Less access to G+S

Question 9

Price discrimination

Anti-competitive business behaviour

Answer 9

charge different price to different customers

Question 10

Exclusive dealing

Answer 10

Refuses to supply their products or services to one or more firms due to an special agreement.