Flashcards on Market Structures and Competition Law
Market Structures and Competition Law: A Student Guide
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Market structure
56 cards
Card 1
Question: What is a market in economics?
Answer: A place where buyers and sellers come together for the purposes of exchange.
Card 2
Question: What determines the level of competition in a market?
Answer: How many firms operate in the market and how easily new firms can enter.
Card 3
Question: How does a firm's market power change as competition decreases?
Answer: Firms gain more market power and greater control over price as competition decreases.
Card 4
Question: Define market power.
Answer: The ability of a buyer or seller to affect or change the market price by changing quantity supplied or quantity demanded.
Card 5
Question: List the four main market structures covered.
Answer: Perfect competition, monopolistic competition, oligopoly, and monopoly.
Card 6
Question: In which market structure are buyers and sellers price-takers and the product homogeneous?
Answer: Perfect competition.
Card 7
Question: Which market structure features differentiated products and many sellers but less than in perfect competition?
Answer: Monopolistic competition.
Card 8
Question: Which market structure has a few sellers who dominate and mostly differentiated products?
Answer: Oligopoly.
Card 9
Question: Which market structure has one seller offering a unique product with no substitutes?
Answer: Monopoly.
Card 10
Question: What kinds of barriers to entry exist in monopoly and oligopoly according to the content?
Answer: High barriers such as government legislation and licences, trademarks and patents, and high start-up costs.