Podcast
Questions and Answers
What are the characteristics of a perfectly competitive market?
What are the characteristics of a perfectly competitive market?
Freedom of entry/exit for sellers Homogeneous goods Many buyers Many sellers who are price takers Firms aim for profit maximization High degree of knowledge among buyers and sellers
Why are goods considered homogenous in perfect competition?
Why are goods considered homogenous in perfect competition?
Perfect substitutes are available with no product differentiation.
How does the number of buyers in a perfectly competitive market influence price?
How does the number of buyers in a perfectly competitive market influence price?
No individual buyer can influence the price as each buys only a tiny percentage of total output.
Explain why firms in perfect competition are price takers.
Explain why firms in perfect competition are price takers.
What is the profit maximization rule for firms in perfect competition?
What is the profit maximization rule for firms in perfect competition?
Why is competitive advertising not common in perfectly competitive markets?
Why is competitive advertising not common in perfectly competitive markets?
List two advantages of perfect competition for consumers.
List two advantages of perfect competition for consumers.
What is a significant disadvantage of perfect competition for producers?
What is a significant disadvantage of perfect competition for producers?
How does perfect competition affect product variety?
How does perfect competition affect product variety?
Explain why individual sellers in perfect competition cannot influence the market price.
Explain why individual sellers in perfect competition cannot influence the market price.
What is another name for imperfect competition?
What is another name for imperfect competition?
Describe the role of product differentiation in imperfect competition.
Describe the role of product differentiation in imperfect competition.
Why are barriers to entry low in an imperfectly competitive market?
Why are barriers to entry low in an imperfectly competitive market?
How does brand loyalty affect the demand curve in imperfect competition?
How does brand loyalty affect the demand curve in imperfect competition?
What is the typical shape of the demand curve for firms in imperfect competition?
What is the typical shape of the demand curve for firms in imperfect competition?
List two advantages of imperfect competition for consumers.
List two advantages of imperfect competition for consumers.
Why are prices generally higher in imperfect competition compared to perfect competition?
Why are prices generally higher in imperfect competition compared to perfect competition?
What type of advertising is most common in imperfect competition?
What type of advertising is most common in imperfect competition?
Explain the concept of excess capacity in imperfect competition.
Explain the concept of excess capacity in imperfect competition.
How does the existence of many sellers affect market dynamics in imperfect competition?
How does the existence of many sellers affect market dynamics in imperfect competition?
What are the main characteristics of a monopoly?
What are the main characteristics of a monopoly?
How does a monopoly maximize its profits?
How does a monopoly maximize its profits?
What is a barrier to entry, and give an example in the context of a monopoly?
What is a barrier to entry, and give an example in the context of a monopoly?
Explain why monopolies can operate inefficiently.
Explain why monopolies can operate inefficiently.
What is the relationship between the MR curve and the AR curve in a monopoly?
What is the relationship between the MR curve and the AR curve in a monopoly?
How does market concentration affect competition?
How does market concentration affect competition?
List two advantages of monopolies.
List two advantages of monopolies.
Why might a monopoly have no incentive to be creative or innovative?
Why might a monopoly have no incentive to be creative or innovative?
Why might a monopoly have no incentive to be creative or innovative?
Why might a monopoly have no incentive to be creative or innovative?
Describe price discrimination and provide an example.
Describe price discrimination and provide an example.
What conditions are necessary for price discrimination to occur?
What conditions are necessary for price discrimination to occur?
What defines an oligopoly?
What defines an oligopoly?
How does product differentiation work in an oligopoly?
How does product differentiation work in an oligopoly?
What is meant by interdependent firms in an oligopoly?
What is meant by interdependent firms in an oligopoly?
Describe price rigidity in an oligopolistic market.
Describe price rigidity in an oligopolistic market.
What is limit pricing and why is it used in oligopolies?
What is limit pricing and why is it used in oligopolies?
Explain the concept of price leadership in an oligopoly.
Explain the concept of price leadership in an oligopoly.
List two advantages of oligopolies for consumers.
List two advantages of oligopolies for consumers.
Why might consumers be exploited in an oligopoly?
Why might consumers be exploited in an oligopoly?
How does non-price competition manifest in an oligopoly?
How does non-price competition manifest in an oligopoly?
What role does the Competition and Consumer Protection Commission (CCPC) play in regulating oligopolies?
What role does the Competition and Consumer Protection Commission (CCPC) play in regulating oligopolies?
