Podcast
Questions and Answers
Article 38 of the French Constitution recognizes the freedom of enterprise within a market economy.
Article 38 of the French Constitution recognizes the freedom of enterprise within a market economy.
False (B)
In a competitive market, businesses strive to attract consumers, while consumers independently select the most suitable option.
In a competitive market, businesses strive to attract consumers, while consumers independently select the most suitable option.
True (A)
Free competition acts as the bedrock of a market economy, fostering efficacy and benefits for consumers.
Free competition acts as the bedrock of a market economy, fostering efficacy and benefits for consumers.
True (A)
In completely free-market economies, government intervention and regulation are non-existent across all sectors.
In completely free-market economies, government intervention and regulation are non-existent across all sectors.
Deregulation efforts in sectors like telecommunications, energy, and transport aim to decrease the degree of competition within those markets.
Deregulation efforts in sectors like telecommunications, energy, and transport aim to decrease the degree of competition within those markets.
Monopolies, by their very nature, promote robust competition by encouraging multiple firms to innovate within a particular market.
Monopolies, by their very nature, promote robust competition by encouraging multiple firms to innovate within a particular market.
Historically, state-established monopolies in Spain existed for products such as salt and bananas.
Historically, state-established monopolies in Spain existed for products such as salt and bananas.
Oligopolies always foster intense competition between a small number of dominant firms, leading to lower prices for consumers.
Oligopolies always foster intense competition between a small number of dominant firms, leading to lower prices for consumers.
Collusive agreements, such as price-fixing, represent anticompetitive conduct by businesses that seek to avoid market competition.
Collusive agreements, such as price-fixing, represent anticompetitive conduct by businesses that seek to avoid market competition.
A firm with a dominant position engaging in fair and ethical practices to attract more customers is considered an abuse of its position.
A firm with a dominant position engaging in fair and ethical practices to attract more customers is considered an abuse of its position.
Flashcards
Freedom Of Enterprise
Freedom Of Enterprise
Freedom to conduct business within a market-driven system.
Competitive Market
Competitive Market
Rivalry among businesses to attract customers; customers can freely select.
Free Competition
Free Competition
Cornerstone of the market economy, fostering efficiency, innovation, and consumer benefits.
Government planning
Government planning
Interventions or regulations by the government in a market economy, such as price controls or licensing.
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Monopoly
Monopoly
A market where only one company is the provider of goods or services.
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Oligopoly
Oligopoly
Market dominated by a small number of firms, which can mimic a monopoly.
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Collusive Agreements
Collusive Agreements
Secret agreements between companies to avoid competition, like setting prices together.
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Abuse of Dominant Position
Abuse of Dominant Position
When a leading company uses unfair methods to push out competitors.
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- Article 38 of the Spanish Constitution recognizes the freedom of enterprise within a market economy
Market and Free Competition
- Businesses compete for consumers in a competitive market
- Consumers freely choosing the best offers
- Free competition is the foundation of a market economy
- Free competition ensures efficiency, innovation, and consumer benefits
Limitations to Free Competition
- Competition is desirable, but never absolute
- Government planning restricts competition by regulating certain sectors with price controls and licensing requirements
- Deregulation efforts have occurred in telecommunications, energy, and transport
- Monopolies eliminate competition, sometimes by state establishment, like past Spanish monopolies on salt and matches
- Oligopolies consist of a few dominant firms that can collude to limit competition
Anticompetitive Conduct by Business
- Collusive agreements occur when businesses coordinate to avoid competition, such as price-fixing
- Abuse of dominant position happens when a leading firm uses unfair practices to eliminate competitors
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