Markets 3

Question 1

What is a monopoly?

Answer 1

Business with 25% or more market share.
Have barriers of entry.
They Are Price makers.

Question 2

What is the impact of removal of a monopoly.

Answer 2

Prices may rise.
Greater choice of Provider.

Question 3

What is monopoly competition?

Answer 3

many relatively small businesses; no dominant businesses; few barriers to entry; similar products with some differentiation

Question 4

What is an Oligopoly.

Answer 4

Many Businesses but only a few dominate the market.
Some barriers to entry
Short price wars can occur

Question 5

Advantages of Oligopoly?

Answer 5

-Large size leads to Economies of scale
-High profits means money for innovation and investment.
-provides wide range of choice.

Question 6

What is Perfect competition?

Answer 6

Where many firms produce virtually identical products with similar products. Don’t earn excessive profits and can leave and enter freely.

Question 7

Characteristics of Perfect competition.

Answer 7

Not one business competing is large enough to influence activities of another.
There are no leader and no price leader.