F291 Competition and market structure quiz

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1. What is concentration ratio?

  • Proportion of the total market sales held by the top firms, e.g. four firm concentration ratio of 75% means that 4 firms account for 75% of all sales within market
  • 50% market share is took by 2 firms
  • Each company has 25% market share
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2. What do perfect competition and monopolistic competition markets have in common?

  • Competition is direct
  • Both have large number of firms within the industry
  • Both have 2 main competitors

3. Give one modern day example of a Monopoly

  • Argos
  • Post Office
  • Apple

4. What occurs in a Oligopoly?

  • Industry is dominated by small number of very large producers but there is a large number of firms within the market
  • Monopoly by biggest firm
  • Lots of very similar businesses

5. Oligopoly has high barriers to entry and exit

  • True
  • False
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