Go on. Explore!

lvl 0 • 0 xp

lvl 1

Home Market Decks Interests

Competition

memorize.ai (lvl 286)

(0)

39 cards

()

Section 1

Preview this deck

disadvantages of competition to the economy

Front

1 / 39

Competition Prep

0.0

0 reviews

5			0
4			0
3			0
2			0
1			0

Active users

All-time users

Favorites

Last updated

6 years ago

Date created

Mar 1, 2020

Cards (39)

Section 1

(39 cards)

disadvantages of competition to the economy

Front

when firms go bust, it can be difficult to reallocate resources like capital and labour to other uses so those resources are wasted

Back

disadvantages of competition to consumers

Front

uncertainty in the market - if holiday firms become unprofitable and leave the market (or go bust) tourists can become stranded.

Back

advantages of a monopoly

Front

economies of scale, potential for innovation, if natural it may be more efficient

Back

explain economies of scale for a monopoly PRO

Front

large firms benefit form economies of scale. If a firm exploits thesis economies of scale, they can reduce average costs and sell at lower prices

Back

explain what price competition is

Front

firms can use high prices in a niche market, low prices to drive out smaller competition, low price and stay low in a competitive market, low and slow increase to maintain profits, high and stay high if target audience has a high income

Back

how do firms compete?

Front

innovation and product differentiation, price competition

Back

explain collusion in oligopolies

Front

firms enter into illegal agreements to restrict competition. this happens in price fixing, or not competiting in certain geographic areas

Back

explain less choice for a monopoly

Front

because there is only one dominant company, consumers basically have to buy from that company so there is very little choice

Back

explain inefficiency for a monopoly

Front

a monopolistic firm has no competitive pressure to be efficient to reduce costs or improve productivity

Back

explain non price competition in oligopolies

Front

firms use other methods other than price to compete, becuase they are afriad of losing out in a price war. they might use branding, celebrity product endorsement, marketing or promotions, innovation or innovative marketing

Back

disadvantages of competition to firms

Front

price war can lead to loss of profits

Back

explain higher prices for a monopoly

Front

because only one firm dominates the market, they can charge any price they want because consumers have little or no substitutes

Back

disadvantages of a monopoly

Front

higher prices, less choice, bad quality, reduce innovation, remain inefficient

Back

explain bad quality and reduce innovation for a monopoly

Front

because firms have no competition, there is no incentive to innovate or improve product quality

Back

advantages of a small firm / why small firms remain small to the firm

Front

flexibility, lower wages to pay, innovation, personal service,

Back

disadvantages of growth to a small firm

Front

loss of control, higher taxes, diseconomies of scale

Back

definition of a monopoly

Front

a market structure where one firms dominates the market or in a pure monoply a single firm controls the whole industry

Back

advantages of competition to consumers

Front

lower prices, more choice, better quality, constant innovation

Back

explain interdependence in oligopolies

Front

when businesses take into account the likely reactions of rivals to any change in price, output, marketing, and location

Back

explain natural monopoly for a monopoly

Front

more efficient to have one supplies - eg. SP group is the sole supplier of electricity in sg becuase its more efficient

Back

explain economies of scale in oligopolies

Front

can lower prices as they have lower average costs (competition with smaller firms)

Back

example of firm that differentiate

Front

lush uses all natural ingredients

Back

disadvantages of oligopolies

Front

high prices: collision, branding

Back

advantages of competition to a firm

Front

competition encourages efficiency

Back

features of an oligopoly

Front

interdependance, barriers to entry, price rigidity, non-price competition, economies of scale, collusion

Back

explain price rigidity in oligopolies

Front

the nature of interdependence means prices are often rigid and dont change much. firms are also reluctant to enter a price war as selling at low prices reduces profits

Back

explain potential of innovation for a monopoly

Front

since monopolies are large and make high profits, they have the money to invest in research and development which allows for innovation and improving their product.

Back

advantages of growth to a small firm

Front

higher revenue and profits, economies of scale so lower average costs

Back

explain firms innovate + differentiate to compete

Front

encourages consumers to buy from them, brand new products, differentiate from competition

Back

example of firms that innovate

Front

samsung + apple constantly innovate to keep ahead of each other

Back

advantages of oligopolies

Front

economies of scale, consumers have choice, competition amongst big players (innovation)

Back

explain high start up costs for a monopoly

Front

huge initial cost in setting up a business prohibits many potential competitors

Back

explain barriers to entry in oligopolies

Front

new firms will find it difficult to enter the market for reasons like marketing costs

Back

explain economies of scale for a monopoly CON

Front

large well known firms benefit from economies of scale which means they have lower average costs. This allows them to prevent new entries in a market from succeding

Back

explain legal barriers for a monopoly

Front

pure monopolies exist because governments do not allow other companies to compete against them or products are patented

Back

features of a monopoly

Front

unique products, control over prices, high barriers to entry

Back

explain marketing barriers for a monopoly

Front

competing against well known fashionable brands is difficult eg. Nike, Apple

Back

disadvantages of a small firm

Front

higher costs, vulnerability, difficulty finding staff, lack of finance

Back

list barriers to entry in a monopoly

Front

high start up costs, economies of scale, marketing barriers, legal barriers

Back