Competitive and concentrated markets

What is a market structure?

The characteristics of a market that determine how firms behave and compete.

What are the main types of market structures?

Perfect competition, monopolistic competition, oligopoly, and monopoly.

What is a competitive market?

A market with many buyers and sellers where no single firm has market power.

What are the features of a competitive market?

Many firms, similar products, easy entry and exit, price competition.

What is the benefit of competition for consumers?

Lower prices, more choice, better quality.

How does competition affect producers?

It encourages efficiency, innovation, and cost control.

What is a non-competitive market?

A market where one or few firms dominate and there is limited competition.

What is a monopoly?

A market with only one seller or a firm that dominates the market (usually over 25% market share).

What are the disadvantages of monopolies for consumers?

Higher prices, less choice, and potentially lower quality.

What is an oligopoly?

A market dominated by a few large firms.

What are some features of an oligopoly?

Price setting power, possible collusion, and high barriers to entry.

What is market concentration?

The extent to which a few firms dominate total market output.

What is a concentrated market?

A market with a small number of large firms holding significant market share.

What are barriers to entry?

Obstacles that make it difficult for new firms to enter a market.

What is the labour market?

The market where workers offer their labour and employers demand it.

Who are the suppliers in the labour market?

Workers offering their time and skills.

Who are the demanders in the labour market?

Employers looking to hire workers.

What determines the wage rate in the labour market?

The interaction of supply and demand for labour.

What causes an increase in demand for labour?

Higher demand for goods, increased productivity, or lower labour costs.

What causes an increase in supply of labour?

Population growth, better education and training, or increased immigration.

What are the benefits of a competitive labour market?

Fair wages, better working conditions, and employment opportunities.

What role does the government play in the labour market?

It can set minimum wages, provide training, and regulate employment laws.

What is wage differentiation?

Differences in wages due to skill levels, experience, education, or industry.

What are some reasons for wage differences?

Skill level, education, demand for the job, risk, and discrimination.

How can trade unions affect the labour market?

They can negotiate better wages and conditions for workers.