Under the Boardwalk
What kind of control do firms in a perfectly competitive market have over price?
no control over price (price takers)
How many buyers and sellers are there in perfectly competitive market?
many buyers and sellers
How many firms are in a market that is considered to be an oligopoly?
a few that dominate
What barrier to entry exist in monopolistic competition?
low barriers exist
An electronics store charges 10% less for a new television than other electronics stores. The store is engaging in ________ competition.
Price
With Perfect Competition, competition is considered _______.
very HIGH
"My product is unique (you can't get it anywhere else) and this market is very hard, if not impossible to break in to. Who am i?"
What is a monopoly?
What type of products are offered in perfect competition?
identical products are offered
This is an agreement among firms to divide the market, set prices, or limit production.
What is collusion?
This is the amount of control a monopolistically competitive firm has over price.
What is slight control?
If a consumer chooses to go to the movies rather than to a pizza parlor, then the movie theater and the pizza parlor are considered....
Engaged in Price Competition Direct Competitors
Engaged in Prospecting Indirect Competitors
Indirect competitors
The structure which provides competition between franchises such as fast food (ie. McDonalds vs Burger King)
Monopolistic Competition
What kind of variety is there in the goods being produced in a monopoly?
no variety because they are the only seller
What kind of information do buyers and sellers have about the products in perfectly competitive markets?
full information about features and price
What barriers to entry exist in oligopolies?
high barriers exist
These are some of the ways monopolistically competitive firms set themselves apart from their competitors. They include service level and physical characteristics.
What is nonprice competition?
Max purchased a new car, she was able to get part of the purchase price back from the car’s manufacturer. The car’s manufacturer engaged in
Nonprice Competition Offering Rebates Price Fixing Clearance Sales Cartel Money Back Guarantee
Offering Rebates
Name one of the "illegal" practices we talked about
Collusion, Predatory Pricing, Price Fixing, cartels?
What kind of control is there over price in a monopoly?
total control over price (price makers)
One of the ways that competition benefits customers is by encouraging businesses to:
Increase the price of their products. Improve their existing products. Develop fewer new products to sell. Reduce the number of their services.
Improve their existing products.
This is the name for a formal organization of producers that agree to coordinate prices and production.
What is a cartel?
Consumers stick with certain goods/services because of what
Brand loyalty, and/or preferences
Offering high quality, large assortments, warranties and free shipping are examples of
Nonprice Competition Price Competition Rebates Price Fixing
Nonprice Competition
One of the main principles of the private enterprise system
Competition
Because sellers have no influence over the price in this market structure they are called this.
Price takers - no control over price
What do we call the way that firms attract customers through style, service, or location, but not a lower price?
non-price competition
This is making a product similar, but not identical to other products in the market.
What is differentiation?
A business that advertises a special sale as well as its curb side pick up service is using a combination of ___________ competition.
Direct and Indirect Price and Nonprice Perfect and Monopolistic Rebates and Clearance
Price and Nonprice
Name the 3 market structures which have HIGH levels of competition.
Perfect Competition, Monopolistic Competition, Oligopoly
The five requirements for a perfectly competitive market.
Give an 2 examples of an oligopoly which consists of a few dominant sellers in a market or industry.
cell phones, cars, cereals, colas
What type of market structure is most commonly found in a private enterprise economy such as the United States?
Monopolistic Competition
Which piece of legislation busted up the trust monopolies back in 1890?
Sherman Antitrust Act
What type of organization, not structure, does not allow price discrimination in any way.
monopoly monopolistic competition collusion Cartels oligopolies Price Fixers deregulation Franchises Government monopoly
Cartels