Unit 6 - Buyers and Sellers in Markets Flashcards
To figure out your economic profit of a situation, what two things must you subtract from your revenue?
Operational costs and opportunity costs
what two types do economists break profits down into?
Accounting and economic
what is profit derived from subtracting operating costs from revenue?
Accounting profit
What profit is earned when there is zero economic profit and total revenues equal total profit?
Normal profit
what are the four economic markets?
Perfect competition
Monopoly
Oligopoly
Monopolistic competition
____________ exist when a firm or business has no competition in the manufacturing of a good or the providing of a service.
Monopolies
________________ exists when there are many competitors in an industry with individual businesses producing different versions of a given product.
Monopolistic competition
_______________ occurs frequently in a monopolistic competition market.
New competition
In highly competitive markets, producers and consumers are likely to find an equilibrium where the quantity supplied is ________________ to the quantity demanded at the current price.
Exactly equal
In order to be a perfectly competitive market, the five conditions must be met. What are the five conditions?
there must be many buyers and sellers
buyers and sellers must have perfect information
all producers are price-takers
sellers can enter the market freely
Sellers can exit the market freely
Because products must be identical in order to have perfect competition, what must be the only significant factor in determining which seller a buyer wants to purchase from?
Price
What four factors do sellers emphasize in non-price competition to promote their goods or services?
Quality
Brand reliability
Service level
Speed
What is a market model where many firms and businesses compete against each other to create an innovative product at the best cost, which ultimately benefits society?
Perfectly competitive markets
What is the MR=MC rule?
Marginal revenue = marginal cost
What are the four different types of monopolies?
Natural monopoly
Geographic monopoly
Technological monopoly
Government monopoly
The automobile industry is an example of what type of imperfect competition market?
Oligopoly
What is the strategic planning and implementation process devised to entice consumers to purchase or engage with a particular product or service?
Marketing
what is advertising?
persuasive audio or visual message used in marketing that promotes the sale of a product or service to a firm’s existing or potential consumers
What are the steps in the multi-step process of advertising?
Research
Planning
Implementation
Measurement
Most businesses utilize an ______________________ to reach their target market and establish or raise brand awareness.
Advertising campaign
what is ROI?
Return on investment
what percent of the global market does Pepsi control?
30%
In 2014, what was Coca-Cola’s advertising budget?
$3.49 billion
What was the first marketing plan that occurred between Coke and Pepsi during the Great Depression?
Pepsi started offering 12 oz bottles as compared to Coke only offering 6 oz bottles
In what year did Coca-Cola come out with “New Coke”?
1985
