Standard 3 Market Structures and Business Organizations Flashcards

This set of vocabulary flashcards covers the characteristics of market structures, business organizations, and market failures as outlined in the Standard $$3$$ Study Guide and Unit $$3$$ notes.

Market Structures Characteristics

The set of criteria highlighted in the Google Slide Notes, including the number of firms, types of products, ability to control prices, and ease or barriers to entry.

Perfect Competition

A market structure characterized by a large number of firms, identical products, no ability to control prices, and total ease of entry for new businesses.

Monopolistic Competition (polyopoly)

A market structure with many firms, similar but differentiated products, some ability to control prices, and relatively easy entry into the market.

Non-price Competition

A method used by firms to compete through factors other than price; it involves $4$ specific characteristics including branding, quality, and service.

Oligopoly

A market structure dominated by a few large firms producing identical or differentiated products, having a high ability to control prices, and facing high barriers to entry.

Monopoly

A market structure with only one firm, unique products with no close substitutes, total ability to control prices as a price maker, and blocked entry for competitors.

Market Failure

A situation where the market does not allocate resources efficiently; an example must be provided to demonstrate the loss of economic value.

Externality

A consequence or side effect of an industrial or commercial activity that affects other parties; can be categorized as both positive and negative.

Sole Proprietorship

A business owned and operated by a single فرد who has total control and receives all profits, but faces unlimited liability.

Partnership

A business organization owned by $2$ or more persons which is characterized by shared responsibility and shared profits.

Corporation

A large business entity owned by individual stockholders, each of whom has limited liability for the firm's debts.

Franchise

A semi-independent business that pays fees to a parent company in exchange for the exclusive right to sell a specific product or service in a given area.

Number of Firms

A key characteristic of market structures that identifies how many competitors are present in a given industry.

Types of Products

A market characteristic that classifies whether goods are identical across firms or differentiated through non-price factors.

Ability to Control Prices

A metric used to define market structures by measuring how much power a firm has to set its own price versus being a price taker.

Ease/Barriers to Entry

A characteristic of market structures that assesses how difficult or simple it is for a new business to start operating within a specific market.