Context Flashcards
(48 cards)
What is the simplest example of a market structure?
Perfect Competition
Perfect competition is characterized by many buyers and sellers, homogenous goods, and low barriers to entry.
What percentage of jobs in India does farming account for?
55%
This statistic indicates the significance of the agricultural industry in the Indian economy.
What are the barriers to entry in perfect competition?
Low barriers to entry
Farming requires very few start-up costs, with many farmers already owning inherited land.
What type of goods are produced in perfect competition?
Homogenous goods
Goods are similar due to consistent environmental conditions across regions.
In perfect competition, firms set prices at what point to maximize profit?
Where MC=MR
This condition ensures both productive and allocative efficiency.
Which industry is cited as an example of monopolistic competition?
Fashion industry
The industry has low barriers to entry and differentiation among products.
What has reduced the need for conventional brick-and-mortar stores in the fashion industry?
Technological advancements
Online clothing stores can be created at a fraction of the cost.
Name two companies that dominate the online fashion market.
- Boohoo pic
- ASOS
These companies have captured a significant market share due to low operating costs.
What is an alternative industry that is monopolistically competitive?
Airline industry
Budget airlines have increased competition in this market.
What do budget airlines do to reduce operating costs?
Lease their planes
Leasing instead of buying significantly lowers expenses.
What market structure does the UK supermarket industry operate under?
Oligopoly
The Big 4 supermarkets dominate the market.
What percentage of the market share do the Big 4 supermarkets own?
More than 70%
This concentration of market share indicates significant market power.
What practice has Tesco been accused of that creates high barriers to entry?
Land banking
This involves purchasing land without plans to develop it, preventing competitors from accessing it.
What is the minimum hourly wage that Morrisons became the first UK supermarket to pay all staff?
£10 per hour
This occurred in January 2021.
What are the Big 4 supermarkets’ contributions to the market?
Corporate social responsibility (CSR)
This includes initiatives like building leisure centres to create jobs.
Which two companies are regarded as a duopoly in the aerospace industry?
Boeing and Airbus
They hold more than 90% of the market share.
What is a monopoly?
A market structure where one company controls a significant market share
Examples include Google, Apple, and Amazon.
What percentage of the market share for search engine use does Google control?
70%
Google was formed in 1998.
What platform did Apple and Amazon ban that led to major backlash?
Parler
This occurred after the storming of the US Capitol in January 2021.
What is the highest barrier to entry in a market?
Government legislation
It acts as a major deterrent for new entrants.
What was the role of the Financial Services Authority (FSA) in the British financial services industry?
To approve firms wanting to set up stock exchanges or other services
This process was costly and lengthy.
How do Apple and Amazon exploit their monopoly power?
By operating a market and competing in it
They promote their own apps/products over third-party competitors.
Fill in the blank: The app store operated by Apple allows _______ to sell their apps.
third-party developers
This allows for competition, but Apple also promotes its own applications.
What is one example of a product that Apple has developed for its own app store?
iMovie
Other examples include Keynote and GarageBand.
