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Economics Micro > Perfect Competition, Imperfectly Competition, Imperfectly Competitive Markets And Monopoly > Flashcards

Perfect Competition, Imperfectly Competition, Imperfectly Competitive Markets And Monopoly Flashcards

1
Q

What is anti competitive behaviour?

A

Business strategies employed to deliberately limit contestability within markets

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2
Q

What are artificial barrier to entry?

A

Barrie’s to market entry that are man made

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3
Q

What does break even mean?

A

The same as normal profit

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4
Q

What does cartel mean?

A

Formed by groups of producers when they illegally decide to collide and not compete

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5
Q

What is collective bargaining?

A

When the members of a union act as a unit to increase bargaining power when negotiating with employers

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6
Q

What is collusion?

A

Illegal cooperation between multiple firms, forming a cartel

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7
Q

What is a concentrated market?

A

A market with very few firms

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8
Q

What is a concentration ratio?

A

The total market share of the leading firms in an industry; these firms output as a percentage of total output

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9
Q

What is consumer surplus?

A

Difference between the prices consumers are willing to pay and the prices they actually pay

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10
Q

What is contestability?

A

Ease with which competitors can enter a market

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11
Q

What is deadweight loss?

A

Loss of social welfare derived from economic activity

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12
Q

What does demerger mean?

A

When a firm sells parts of its business to create separate smaller firms

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13
Q

What is divorce of ownership and control?

A

The process in which owners become increasingly sepersted from those managing the business

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14
Q

What is a duopoly?

A

A market dominated by two businesses

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15
Q

What is duopsony?

A

Two major buyers of a good or service in a market

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16
Q

What is dynamic efficiency?

A

Improvements to efficiency in the long run, brought about by investment into research and development

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17
Q

What is a entry barrier?

A

Make it impossible/more difficult for firms to enter a market

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18
Q

What are exit barriers?

A

Make it impossible/more difficult for firms to exit a market

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19
Q

What is game theory?

A

Where there are two or more interacting decision makers and different decisions lead to differing outcomes

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20
Q

What is a hit and run?

A

Firms enter a market, make supernormal profits, then leave; possible because of low barriers to entry and exit

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21
Q

What is Imperfect competition?

A

Any market structure between the extremes of perfect competition and a pure monopoly

22
Q

What is innovation?

A

Improving upon an existing product or process

23
Q

What is a kinked demand curve?

A

Assumes a business may face a dual demand curve for its product based on the oligopoly market structure

24
Q

What is limit pricing?

A

Lowering the price of a good or service to around average cost, creating an artificial barrier to entry

25
Q

What is market share maximisation?

A

When a firm maximised their percentage share of the market in which it sells its product

26
Q

What is the market structure?

A

The characteristics of a market

27
Q

What is a merger?

A

Multiple firms uniting to form one larger firm

28
Q

What is a monopoly?

A

Market with only one supplier

29
Q

What is monopoly power?

A

The ability of a firm to be a price maker rather than a price taker; the ability to set prices

30
Q

What is a monopsony?

A

Market with only one consumer

31
Q

What is a natural barrier to entry?

A

Barriers to market entry that are not man made

32
Q

What is a natural monopoly?

A

When the ideal number of firms in an industry is 1

33
Q

What is an oligopoly?

A

A market dominated by a few firms

34
Q

What is predatory pricing?

A

Temporarily lowering a goods price below average cost creating an artificial barrier to entry

35
Q

What is price competition?

A

Reducing the price of a product, thus stripping demand from competitors

36
Q

What is price discrimination?

A

When a firm charges different prices to different groups of consumers for the same good

37
Q

What is price leadership?

A

The dominant firm in the market sets the price and less dominant firms alter their prices accordingly

38
Q

What is a price taker?

A

A firm that passively accepts the market price set by forces beyond the firms control

39
Q

What is a price war?

A

Where the multiple firms cut prices each firm trying to undercut its competitors and gain market demand

40
Q

What is the principal agent problem?

A

Where those in control of a firm, act in their own best interest, rather than that of the owners

41
Q

What is producer surplus?

A

Difference between the prices producers are willing to accept and the prices they actually accept

42
Q

What is product differentiation?

A

Differences between multiple similar goods and services

43
Q

What is profit maximisation?

A

Occurs where the positive difference between total revenue and total costs is at its highest

44
Q

What is a pure monopoly?

A

Only one firm in market

45
Q

What is sales maximisation?

A

When sales revenue is at its highest

46
Q

What is satisficing?

A

Due to conflicts of interest, managers often run films to make the minimum level of acceptable profit

47
Q

What is a shareholder?

A

Economic agents concerned on growth of the firm for monetary

48
Q

What is a stakeholder?

A

Economic agents concerned on the growth of the firm for not necessarily monetary reasons

49
Q

What is static efficiency?

A

Efficiency in the short run

50
Q

What is a takeover?

A

When a firm buys another firm with the latter becoming a part of the former

Economics Micro (8 decks)

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