Statistics for Edexcel Economics 7. Market Structures

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Answer Stats

Description	Term	% 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 similar	Cartel	100%
A market without barriers to entry or exit regardless of the market concentration	Contestable market	100%
Where the firms in a market cannot control prices, with freedom of entry and exit	Perfect Competition	100%
Are allocative and/or productive efficiency achieved in a monopoly?	No	50%
That profit made in the long-run under perfect competition	Normal profit	50%
A market structure with many participants that produces allocative and productive efficiency in long-run equilibrium	Perfect Competition	50%
That business objective assumed in the models of perfect competition, monopoly, monopolistic competition, and oligopoly	Profit maximisation	50%
The number of firms that are are usually used for measuring the n-firm concentration ratio	100	0%
That which arises where price equals marginal cost	Allocative efficiency	0%
When an economy is producing a balance of goods and services that matches consumer preferences	Allocative efficiency	0%
Where prices in two market segments are equalised by participants purchasing and reselling products	Arbitrage	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 share	Barometric Price Leadership	0%
Obstacles that make it difficult or impossible for new firms to enter a market	Barriers 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 market	Barriers to entry	0%
That which firms can erect through legal devices such as patents, copyright, and operating licences	Barriers to entry	0%
Factors that make it difficult or impossible for incumbent firms to leave a market	Barriers 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 bankrupt	Barrier 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 base	Brand 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 members	Cartel	0%
That which often arises between countries - such as OPEC - as it is near universally illegal for firms	Cartel	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 standards	Collusion	0%
That which firms may engage in so as to; maximise joint profits, reduce costs such as for advertising, and/or reduce uncertainty	Collusion	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 efficiency	Competition	0%
Where the wants and needs of consumers determines the output of producers	Consumer 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 costs	Contestable Market	0%
That the principal idea behind which is that the behaviour of firms is determined by potential competition as well as actual competition	Contestable Markets	0%
A popular method of pricing whereby firms set their price by adding a mark-up to average cost	Cost-plus pricing	0%
The curve that is equal to a firm's average revenue curve	Demand 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 dilemma	Dominant 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-run	Dynamic 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 profit	Economies of Scale	0%
That which allows monopolies and oligopolies to potentially sell at lower prices than under perfect competition	Economies 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 profits	Efficiency	0%
That which is achieved in the long-run under perfect competition when average revenue equals average cost	Equilibrium	0%
A situation arising in a market where a monopoly firm is able to charge each consumer a different price	First 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 differ	Foreign 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-run	Freedom 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 oligopoly	Game 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 industry	High 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 exhausted	Hit and run entry	0%
That which perfect competition assumes that products are, with there being no brand loyalty	Homogenous	0%
The slope of a demand/average revenue curve under perfect competition	Horizontal	0%
Firms already active within a market	Incumbent 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 market	Inefficiency	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 suit	Kink	0%
A model of oligopoly that a firm may face two different demand curves depending on how rivals respond to a change in price	Kinked demand curve model	0%
A barrier to entry in which incumbent firms lower prices so as to be unprofitable to potential competitors	Limit pricing	0%
That curve which is equal to the average revenue curve and demand curve under perfect competition in the short-run	Marginal 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 paribus	Market Concentration	0%
That, the three principal measures of which are; sales/market share, output, and employment	Market concentration	0%
The way in which market share is split between a number of firms	Market concentration	0%
That the principal limitation of which is that it does not reflect regional and local market variations or specific product variations	Market concentration ratio	0%
Those which are larger where there is less competition and/or more product differentiation	Mark-ups	0%
The lowest level of output at which all economies of scale are fully exploited	Minimum efficient scale	0%
A market with product differentiation, relatively elastic price, freedom of entry, and low concentration, such as in fast food restaurants	Monopolistic competition	0%
A market that shares characteristics of both monopoly and perfect competition	Monopolistic competition	0%
That market structure under which long-run equilibrium is reached where average cost equals average revenue, all profits being normal	Monopolistic competition	0%
That the benefits of which are that it increases consumer choice and causes less x-inefficiency due to the presence of competition	Monopolistic 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 scale	Monopolistic competition	0%
That the disadvantages of which are that there is potentially more regulation and a threat that rival firms may enter the industry	Monopoly	0%
A market in which there are barriers to entry and exit and only one firm, which can influence price	Monopoly	0%
The point at which an individual firm is in equilibrium in both the short-run and long-run under perfect competition	MR=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 behaviour	Nash equilibrium	0%
That which arises where there are substantial fixed costs of production or operation but low marginal costs such as an underground rail network	Natural monopoly	0%
The slope of a demand/average revenue curve under a monopoly	Negative slope	0%
A measure of the market share of the largest 'n' firms in an industry	n-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 price	Non-price competition	0%
A market with relatively few firms - perhaps due to moderate economies of scale - that either compete of cooperate	Oligopoly	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 firms	Oligopoly	0%
A situation in which firms openly cooperate to agree prices or market share	Overt 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 market	Partly sunk costs	0%
The which assumes a market has no externalities	Perfect Competition	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 development	Perfect Competition	0%
That which assumes factors of product have both perfect occupational and geographical mobility	Perfect Competition	0%
That which assumes firms and consumers have perfect knowledge	Perfect Competition	0%
That which demand is under conditions of perfect competition, as if price was increased consumers would instantly switch to another firm	Perfectly Elastic	0%
Where firms focus on competing in a smaller market niche such as plus sized clothing	Positioning	0%
Where a firm sets price below average variable cost in an attempt to force rivals out of the market	Predatory pricing	0%
That which increases firms' profits by converting consumer surplus into producer surplus	Price discrimination	0%
The the disadvantages of which are that it reduces consumer surplus and can limit consumer choice by eliminating competition via regional discrimination	Price 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 profits	Price discrimination	0%
That for which firms must have power over price, knowledge of demand, and the ability to prevent arbitrage to be able to institute	Price discrimination	0%
Where a dominant firm changes price forcing others to follow suit to protect their market share	Price leadership	0%
A firm that influence mark price	Price Maker	0%
That which firms under monopolistic competition, oligopoly, and monopoly are in terms of price	Price makers	0%
A firm that must accept whatever price is set in the market as a whole	Price 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 epidemic	Price war	0%
Where firms compete by aggressively cutting prices to increase market share at other firms' expense	Price 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 oligopolies	Prisoner's dilemma	0%
Where firms have the power to influence consumer decisions such as through advertising	Producer sovereignty	0%
The fundamental feature of monopolistic competition	Product differentiation	0%
Where a firm ensures that its own brand of a product is unique via special features and design	Product differentiation	0%
Production at maximum output from a given amount of actors of production at minimum long-run average cost	Productive 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 output	Profit maximisation	0%
The four things referenced in the acronym SPEW, which are used for examining the effect of market structures and policies	Service, price, efficiency, and welfare	0%
That which under perfect competition in the short-run is where price equals minimum average variable cost	Shut down price	0%
The price at which a firm would exit the market	Shut 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 conditions	Static efficiency	0%
Barriers to entry that are built-up by incumbent firms to limit new competition such as limit pricing or high advertising expenditure	Strategic barriers	0%
Barriers to entry that arise naturally in an industry such as economies of scale or high start-up costs	Structural barriers	0%
That which it is assumed a product has no actual or potential examples of under a monopoly	Substitutes	0%
Those type of costs that can be a barrier to entry, examples of which are; advertising expenditure, uniforms, equipment, &c.	Sunk Costs	0%
That some prime of examples of which are; advertising, asset write-offs, lost consumer good-will, redundancy payments, &c.	Sunk costs	0%
A situation in which firms refrain from competing on price though without formal agreement or communication	Tacit collusion	0%
Where a firm is able to charge different groups of consumers a different price for the same product, such as senior discounts	Third degree price discrimination	0%
That which arises where actual average cost exceeds average cost at maximum efficiency	X-inefficiency	0%