Summary Of Market Types

Question 1

Concentration ratio

Answer 1

Measures the market share of the top “n” firms in the industry.

Question 2

Monopsony

Answer 2

Where a market it dominated by a single buyer

Question 3

Perfect competition

Answer 3

Consists of many buyers and sellers, a homogeneous good, perfect information and no barriers to entry

Question 4

Monopolistic competition

Answer 4

Consists of many buyers and sellers, perfect information, no barriers to entry, products are differentiated

Question 5

Oligopoly

Answer 5

Occurs when a market is dominated by a few large independent firms

Question 6

Monopoly

Answer 6

Occurs when a single firm dominates the market

Question 7

Productive efficiency

Answer 7

When a firm produces at minimum average cost

Question 8

Allocative efficiency

Answer 8

Occurs when a firm sets a price equal to marginal cost

Question 9

Welfare analysis

Answer 9

Examines the net effect on consumer and producer surplus of a particular market structure