Economics: Types of Market Structures

12 Questions

What is a characteristic of a monopolistic competition market structure?

Many firms producing slightly differentiated products with easy entry

What type of demand is characterized by a change in price affecting people's consumption habits?

Elastic demand

Which market structure is characterized by a single firm producing a product with no close substitutes and entry is not possible?

Monopoly

What is the term for a company that has the biggest market share in an industry?

Market leader

What is the term for a part of the market where customers have specific needs that are not being fulfilled?

Niche

In an oligopoly market structure, how many firms are there?

A few firms

What type of goods have a short shelf life and a short expiry date?

Fast moving consumer goods

What is the term for a feature of a product that makes it different and better than other similar products?

Unique selling proposition

What is the term for a person who starts their own business, especially when this involves taking risk?

Entrepreneur

What is the term for the official legal right to make or sell an invention for a particular number of years?

Patent

What does it mean to dominate something?

To have control over something

What is the term for a group of similar things situated close together?

Cluster

Study Notes

Market Structure

Perfect competition is characterized by many large firms, identical products, and easy entry, making firms price takers.
Monopolistic competition is marked by large numbers of firms, easy entry, and slightly differentiated products, with each firm being a mini-monopoly and a price maker.
Oligopoly is characterized by few firms, difficult entry, and interdependence among firms, with each firm being affected by others' actions.
Monopoly is a single-firm market with no close substitutes, entry is not possible, and the firm is a price maker.

Market Characteristics

Market leader: the company with the biggest market share (e.g. Nike).
Market challenger: the second-biggest company in the industry (e.g. Adidas), competing with the market leader.
Market followers: the rest of the companies, competing among themselves.
Market nichers: companies that meet special needs of customers.

Products and Demand

Elastic demand: changes in price affect people's choices, with lower prices leading to increased purchases.
Inelastic demand: lowering the price does not affect people's purchasing decisions.
Staple goods/foods: everyday use products (e.g. milk, bread).
Perishable goods/Fast moving consumer goods (f.m.c.g): goods with a short shelf life, short expiry date, and short best before date.
Consumer durables/durable consumer goods: goods that last a long time and are not intended to be bought frequently (e.g. white goods, brown goods).

Marketing Concepts

Unique selling proposition (USP): a feature of a product that makes it different and better than similar products.
Differentiated: a product or service that stands out from others.
Market segmentation: dividing a market into distinct groups based on customer needs and characteristics.
Market segment: a specific group of customers with similar needs and characteristics.
Market share: the percentage of the market controlled by a company.

Business and Entrepreneurship

Entrepreneur: a person who starts their own business, especially when this involves taking risks.
Landlord: a person or organization that owns a building or land and rents it to others.
Headhunter: a recruiter of important personnel for companies.
Attorney: an alternative American term for a lawyer.

General Terms

Address/tackle: to try to deal with a problem.
Cluster: a group of similar things situated close together (e.g. companies).
Vulnerable: likely to be attacked.
Patent: the official legal right to make or sell an invention for a particular number of years.
Dominate: to have control over something or to be the most important person or thing.
Disrupt: to prevent something from continuing as expected.