Statistics for Edexcel Economics 7. Market Structures

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General Stats

  • This quiz has been taken 23 times
  • The average score is 5 of 20

Answer Stats

DescriptionTerm% Correct
That for which to succeed, it is necessary that most firms in an industry are members, there are barriers to entry, and firms' costs and products are similarCartel
100%
A market without barriers to entry or exit regardless of the market concentrationContestable market
100%
Are allocative and/or productive efficiency achieved in a monopoly?No
100%
Where the firms in a market cannot control prices, with freedom of entry and exitPerfect Competition
100%
That business objective assumed in the models of perfect competition, monopoly, monopolistic competition, and oligopolyProfit maximisation
100%
A market structure with many participants that produces allocative and productive efficiency in long-run equilibriumPerfect Competition
50%
The number of firms that are are usually used for measuring the n-firm concentration ratio100
0%
When an economy is producing a balance of goods and services that matches consumer preferencesAllocative efficiency
0%
That which arises where price equals marginal costAllocative efficiency
0%
Where prices in two market segments are equalised by participants purchasing and reselling productsArbitrage
0%
Where one firm raises price to see if others follow suit thereby establishing a new market price, or if not, reduces price again to protect market shareBarometric Price Leadership
0%
That which firms can erect through legal devices such as patents, copyright, and operating licencesBarriers to entry
0%
That which can result form a few firms controlling the source of a raw material which they can prevent firms for which it is a prerequisite from entering the marketBarriers to entry
0%
Obstacles that make it difficult or impossible for new firms to enter a marketBarriers to entry
0%
Factors that make it difficult or impossible for incumbent firms to leave a marketBarriers to exit
0%
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 bankruptBarrier to exit
0%
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 baseBrand loyalty
0%
That the problem of which is that it maximises joint rather than individual profits, thus incentivising firms to cheat at the expense of other membersCartel
0%
That which often arises between countries - such as OPEC - as it is near universally illegal for firmsCartel
0%
That which is legal only where it improves production, distribution, and/or technical progress in goods and the market such as setting joint industry standardsCollusion
0%
That which firms may engage in so as to; maximise joint profits, reduce costs such as for advertising, and/or reduce uncertaintyCollusion
0%
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 efficiencyCompetition
0%
Where the wants and needs of consumers determines the output of producersConsumer sovereignty
0%
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 costsContestable Market
0%
That the principal idea behind which is that the behaviour of firms is determined by potential competition as well as actual competitionContestable Markets
0%
A popular method of pricing whereby firms set their price by adding a mark-up to average costCost-plus pricing
0%
The curve that is equal to a firm's average revenue curveDemand curve
0%
A situation in game theory where a player's best strategy is independent of those chosen by others as in the prisoner's dilemmaDominant strategy
0%
Efficiency achieved over time from taking into account the effects of changes in consumer demand on productive and allocative efficiency in the long-runDynamic efficiency
0%
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 profitEconomies of Scale
0%
That which allows monopolies and oligopolies to potentially sell at lower prices than under perfect competitionEconomies of scale
0%
That which barriers to entry and exit can encourage by promoting research and development in firms wishing to enter a market and those incumbent firms looking to maintain supernormal profitsEfficiency
0%
That which is achieved in the long-run under perfect competition when average revenue equals average costEquilibrium
0%
A situation arising in a market where a monopoly firm is able to charge each consumer a different priceFirst Degree Price Discrimination
0%
That market which is the nearest real-world example of one under perfect competition as the product is homogenous, there are many firms, they are price takers, and there is freedom of entry and exit, though the products and service on offer do differForeign Exchange Market
0%
That which is the salient factor differentiating short-run equilibrium under monopolistic competition from that under a monopoly, thereby making supernormal profits only short-runFreedom of entry
0%
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 oligopolyGame theory
0%
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 industryHigh start-up costs
0%
Where a firm enters a market or industry to take advantage of temporary supernormal profits, exiting when the profits have been exhaustedHit and run entry
0%
That which perfect competition assumes that products are, with there being no brand loyaltyHomogenous
0%
The slope of a demand/average revenue curve under perfect competitionHorizontal
0%
Firms already active within a marketIncumbent firms
0%
That which barriers to entry and exit can encourage where firms do not face much competition and/or likelihood of being driven out of the marketInefficiency
0%
That position on the kinked demand curve that a firm would generally set its price as if it were to increase it, rivals would remain at the original price thus outcompeting them, or if it were to decrease its, rivals would follow suitKink
0%
A model of oligopoly that a firm may face two different demand curves depending on how rivals respond to a change in priceKinked demand curve model
0%
A barrier to entry in which incumbent firms lower prices so as to be unprofitable to potential competitorsLimit pricing
0%
That curve which is equal to the average revenue curve and demand curve under perfect competition in the short-runMarginal revenue curve
0%
That which influence market power in that the higher it is, the more power those firms have to set prices and earn supernormal profits ceteris paribusMarket Concentration
0%
That, the three principal measures of which are; sales/market share, output, and employmentMarket concentration
0%
The way in which market share is split between a number of firmsMarket concentration
0%
That the principal limitation of which is that it does not reflect regional and local market variations or specific product variationsMarket concentration ratio
0%
Those which are larger where there is less competition and/or more product differentiationMark-ups
0%
The lowest level of output at which all economies of scale are fully exploitedMinimum efficient scale
0%
A market with product differentiation, relatively elastic price, freedom of entry, and low concentration, such as in fast food restaurantsMonopolistic competition
0%
A market that shares characteristics of both monopoly and perfect competitionMonopolistic competition
0%
That market structure under which long-run equilibrium is reached where average cost equals average revenue, all profits being normalMonopolistic competition
0%
That the disadvantages of which are that it is not efficient, spends a lot on advertising, may have too much product differentiation, and limits economies of scaleMonopolistic competition
0%
That the benefits of which are that it increases consumer choice and causes less x-inefficiency due to the presence of competitionMonopolistic competition
0%
A market in which there are barriers to entry and exit and only one firm, which can influence priceMonopoly
0%
That the disadvantages of which are that there is potentially more regulation and a threat that rival firms may enter the industryMonopoly
0%
The point at which an individual firm is in equilibrium in both the short-run and long-run under perfect competitionMR=MC
0%
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 behaviourNash equilibrium
0%
That which arises where there are substantial fixed costs of production or operation but low marginal costs such as an underground rail networkNatural monopoly
0%
The slope of a demand/average revenue curve under a monopolyNegative slope
0%
A measure of the market share of the largest 'n' firms in an industryn-firm concentration ratio
0%
Can firms enter or exit a market in the short-run?No
0%
Does an oligopoly achieve productive and/or allocative efficiency?No
0%
Does monopolistic competition achieve allocative and/or productive efficiency?No
0%
Where an oligopolist firm competes by means of technical innovation, advertising, service provision (opening hours, &c), &c, rather than priceNon-price competition
0%
That profit made in the long-run under perfect competitionNormal profit
0%
A highly concentrated market with barriers to entry and exit and with few sellers, in which each firm much take account of the behaviour and likely behaviour of rival firmsOligopoly
0%
A market with relatively few firms - perhaps due to moderate economies of scale - that either compete of cooperateOligopoly
0%
A situation in which firms openly cooperate to agree prices or market shareOvert collusion
0%
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)Pareto efficiency
0%
The loss of resale value such as due to depreciation on a firms assets when leaving the marketPartly sunk costs
0%
That the disadvantages of which are that consumers have less choice, while quality and price cannot be improved as small firms cannot finance research and developmentPerfect Competition
0%
That which assumes firms and consumers have perfect knowledgePerfect Competition
0%
The which assumes a market has no externalitiesPerfect Competition
0%
That which assumes factors of product have both perfect occupational and geographical mobilityPerfect Competition
0%
That which demand is under conditions of perfect competition, as if price was increased consumers would instantly switch to another firmPerfectly Elastic
0%
Where firms focus on competing in a smaller market niche such as plus sized clothingPositioning
0%
Where a firm sets price below average variable cost in an attempt to force rivals out of the marketPredatory pricing
0%
The the disadvantages of which are that it reduces consumer surplus and can limit consumer choice by eliminating competition via regional discriminationPrice discrimination
0%
That which increases firms' profits by converting consumer surplus into producer surplusPrice discrimination
0%
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 profitsPrice discrimination
0%
That for which firms must have power over price, knowledge of demand, and the ability to prevent arbitrage to be able to institutePrice discrimination
0%
Where a dominant firm changes price forcing others to follow suit to protect their market sharePrice leadership
0%
A firm that influence mark pricePrice Maker
0%
That which firms under monopolistic competition, oligopoly, and monopoly are in terms of pricePrice makers
0%
A firm that must accept whatever price is set in the market as a wholePrice Taker
0%
That which began in March 2020 between OPEC and its ally Russia after the latter refused to reduce its oil production in order to maintain prices during the Coronavirus epidemicPrice war
0%
Where firms compete by aggressively cutting prices to increase market share at other firms' expensePrice war
0%
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 oligopoliesPrisoner's dilemma
0%
Where firms have the power to influence consumer decisions such as through advertisingProducer sovereignty
0%
The fundamental feature of monopolistic competitionProduct differentiation
0%
Where a firm ensures that its own brand of a product is unique via special features and designProduct differentiation
0%
Production at maximum output from a given amount of actors of production at minimum long-run average costProductive efficiency
0%
That which is achieved with price discrimination where marginal revenue in the different markets is equal to the marginal cost of producing total outputProfit maximisation
0%
The four things referenced in the acronym SPEW, which are used for examining the effect of market structures and policiesService, price, efficiency, and welfare
0%
The price at which a firm would exit the marketShut down price
0%
That which under perfect competition in the short-run is where price equals minimum average variable costShut down price
0%
Where competition may not promote efficiency in contrast to private cost and benefit?Social cost and benefit
0%
Efficiency at a particular point in time and thus under particular market conditionsStatic efficiency
0%
Barriers to entry that are built-up by incumbent firms to limit new competition such as limit pricing or high advertising expenditureStrategic barriers
0%
Barriers to entry that arise naturally in an industry such as economies of scale or high start-up costsStructural barriers
0%
That which it is assumed a product has no actual or potential examples of under a monopolySubstitutes
0%
That some prime of examples of which are; advertising, asset write-offs, lost consumer good-will, redundancy payments, &c.Sunk costs
0%
Those type of costs that can be a barrier to entry, examples of which are; advertising expenditure, uniforms, equipment, &c.Sunk Costs
0%
A situation in which firms refrain from competing on price though without formal agreement or communicationTacit collusion
0%
Where a firm is able to charge different groups of consumers a different price for the same product, such as senior discountsThird degree price discrimination
0%
That which arises where actual average cost exceeds average cost at maximum efficiencyX-inefficiency
0%

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