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Questions and Answers
What is a characteristic of a monopolistic competition market structure?
What is a characteristic of a monopolistic competition market structure?
What type of demand is characterized by a change in price affecting people's consumption habits?
What type of demand is characterized by a change in price affecting people's consumption habits?
Which market structure is characterized by a single firm producing a product with no close substitutes and entry is not possible?
Which market structure is characterized by a single firm producing a product with no close substitutes and entry is not possible?
What is the term for a company that has the biggest market share in an industry?
What is the term for a company that has the biggest market share in an industry?
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What is the term for a part of the market where customers have specific needs that are not being fulfilled?
What is the term for a part of the market where customers have specific needs that are not being fulfilled?
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In an oligopoly market structure, how many firms are there?
In an oligopoly market structure, how many firms are there?
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What type of goods have a short shelf life and a short expiry date?
What type of goods have a short shelf life and a short expiry date?
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What is the term for a feature of a product that makes it different and better than other similar products?
What is the term for a feature of a product that makes it different and better than other similar products?
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What is the term for a person who starts their own business, especially when this involves taking risk?
What is the term for a person who starts their own business, especially when this involves taking risk?
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What is the term for the official legal right to make or sell an invention for a particular number of years?
What is the term for the official legal right to make or sell an invention for a particular number of years?
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What does it mean to dominate something?
What does it mean to dominate something?
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What is the term for a group of similar things situated close together?
What is the term for a group of similar things situated close together?
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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.
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Description
This quiz assesses your knowledge of different market structures, including perfect competition, monopolistic competition, oligopoly, and monopoly. Identify the characteristics of each type and how they impact the market.
