Market structure

View mindmap
  • market structures
    • barriers of entry/exit
      • Branding and adverising- competing with firms that are already established. (artificial)
      • sunk costs- costs that are non refundable. once you are done with machinery specific to your firm it is no longer useful to anyone and cannot be sold. (natural barrier)
      • legal barriers- licences e.g bus market in the 1980's buss's had special licences to go on certain roads. (natural barrier)
      • anti competitive pricing- established firms set deals that new firms cannot compete with, e.g, 2 for 1 (artificial barrier)
      • High capital costs (natural barriers)
      • re-sale of assets- the price of stocks may fall resulting in a massive loss.(barrier of exit)
      • redundancy costs- staff you need to pay of
      • Economies of scale- other firms cant compete with producing at low prices (natural barrier)
      • cost of ending licence approvals- e.g, paying of rents .
    • limiting pricing and predatory pricing
      • limit pricing-prices are set low enough to make it unprofitable for other firms to enter the market.
      • predatory pricing- prices set below average costs with the aim of forcing rival firms out of business
    • product differentiation
    • pruduct differation
      • the marketing of generally similar products with minor variations ,


No comments have yet been made

Similar Economics resources:

See all Economics resources »See all chapter 3 a2 resources »