Edexcel Economics 7. Market Structures

Description

Term

That which long-term contracts can be, as a firm could be sued for seeking to exit the market during the contract, assuming it hasn't become bankrupt

Where the firms in a market cannot control prices, with freedom of entry and exit

That which can be a barrier to entry as it can make it difficult for new firms to compete with incumbent firms over price, as the former must charge higher prices in order to make profit

Efficiency achieved over time from taking into account the effects of changes in consumer demand on productive and allocative efficiency in the long-run

The analysis of the strategic interaction in competitive situations where the outcome of one participant's actions depends on the actions of another, often used in study of oligopoly

Where firms compete by aggressively cutting prices to increase market share at other firms' expense

A firm that must accept whatever price is set in the market as a whole

Can firms enter or exit a market in the short-run?

The slope of a demand/average revenue curve under perfect competition

That the disadvantages of which are that there is potentially more regulation and a threat that rival firms may enter the industry

Description

Term

That which is the salient factor differentiating short-run equilibrium under monopolistic competition from that under a monopoly, thereby making supernormal profits only short-run

The price at which a firm would exit the market

A firm that influence mark price

Where firms focus on competing in a smaller market niche such as plus sized clothing

A situation of productive and allocative efficiency where it is not possible to make someone better-off without making another worse-off (depending on the value society places on the goods and services concerned)

That profit made in the long-run under perfect competition

That which may promote efficiency as a firm may go out of business if not producing what consumer want at low cost, while a firm may increase profits if it is relatively more efficiency

A market with product differentiation, relatively elastic price, freedom of entry, and low concentration, such as in fast food restaurants

That which can be a barrier to entry as loyal customers have a lower price elasticity of demand thus making it difficult for new firms to build up a customer base

Barriers to entry that arise naturally in an industry such as economies of scale or high start-up costs