Market Structure 1A

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Barriers to entry
Obstacle to a firm entering an industry. Legal barriers, Marketing barriers, limit pricing, large economies of scale, high capital costs, natural barriers.
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Barriers to exit
Obstacles to a firm leaving an industry. Sunk costs, money spent on advertising, specialist equipment, consultancy fees, contractual penalties.
2 of 6
Conduct/Behaviour
Objective of the firm, profit max, sales rev max, sales output max, profit satisfying. Determines price, quantity, quality, effiiency.
3 of 6
Economies of scale
A reduction in long run average costs resulting from an increase in the scale of production. Technical economies of scale(better use of machinery), purchasing economies of scale, selling economies of scale, managerial economies of scale,
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Economies of scale
Financial economies of scale, risk bearing economies of scale. A firm that is too large experiences diseconmies of scale. Managers losing control of the firm due to size.
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Accounting profits
This is economic profit - the profit made in the next best alternative.
6 of 6

Other cards in this set

Card 2

Front

Obstacles to a firm leaving an industry. Sunk costs, money spent on advertising, specialist equipment, consultancy fees, contractual penalties.

Back

Barriers to exit

Card 3

Front

Objective of the firm, profit max, sales rev max, sales output max, profit satisfying. Determines price, quantity, quality, effiiency.

Back

Preview of the back of card 3

Card 4

Front

A reduction in long run average costs resulting from an increase in the scale of production. Technical economies of scale(better use of machinery), purchasing economies of scale, selling economies of scale, managerial economies of scale,

Back

Preview of the back of card 4

Card 5

Front

Financial economies of scale, risk bearing economies of scale. A firm that is too large experiences diseconmies of scale. Managers losing control of the firm due to size.

Back

Preview of the back of card 5
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