Edexcel Economics 7. Market Structures

In this quiz the answers change every time you play! Guess the terms that fit these definitions
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Last updated: March 9, 2020
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First submittedOctober 27, 2019
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The the disadvantages of which are that it reduces consumer surplus and can limit consumer choice by eliminating competition via regional discrimination
Price discrimination
The which assumes a market has no externalities
Perfect Competition
Efficiency achieved over time from taking into account the effects of changes in consumer demand on productive and allocative efficiency in the long-run
Dynamic efficiency
That market structure under which long-run equilibrium is reached where average cost equals average revenue, all profits being normal
Monopolistic competition
A situation in game theory where a player's best strategy is independent of those chosen by others as in the prisoner's dilemma
Dominant strategy
A situation in game theory where each player's chosen strategy maximises payoffs given the other player's choice, so that neither has an incentive to alter behaviour
Nash equilibrium
That which can be a barrier to entry as a firm may need to have access to large amounts of capital such as in the aerospace industry
High start-up costs
Where a dominant firm changes price forcing others to follow suit to protect their market share
Price leadership
That the problem of which is that it maximises joint rather than individual profits, thus incentivising firms to cheat at the expense of other members
A model of oligopoly that a firm may face two different demand curves depending on how rivals respond to a change in price
Kinked demand curve model
That the disadvantages of which are that there is potentially more regulation and a threat that rival firms may enter the industry
The four things referenced in the acronym SPEW, which are used for examining the effect of market structures and policies
Service, price, efficiency, and welfare
Where firms focus on competing in a smaller market niche such as plus sized clothing
A market in which incumbent firms make only normal profit, being unable to set a higher price without attracting entry due to the absence or limitation of both barriers to entry and sunk costs
Contestable Market
The fundamental feature of monopolistic competition
Product differentiation
Those type of costs that can be a barrier to entry, examples of which are; advertising expenditure, uniforms, equipment, &c.
Sunk Costs
That the benefits of which are that it can; allow some consumers to buy an otherwise unafforable product, present opportunities of economies of scale, and secure supply due to higher profits
Price discrimination
A firm that must accept whatever price is set in the market as a whole
Price Taker
That profit made in the long-run under perfect competition
Normal profit
An example of game theory that described why two rational parties may not cooperate, even if the outcome is thus worse than a potential alternative, often used in discussing oligopolies
Prisoner's dilemma
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