-Internal economies of scale / Reduce competiton/increase market share / Reduce x-inefficiency via rationalisations / To achieve vertical integration / Asset ********* / Merge cheaper than internal growth / Managerial rewards
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Give 5 features of oligopoly
Few large firms in industry with high concentration ratios / Interdependence / Price stability / Collusion-Cartels, price leaders / Non-price competition
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Definition of productive efficiency
Achieving cheapest costs for producing a given quantity / Invest point on the ATC curve
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Conditions for price discrimination
Markets separated - by time, distance etc / PED different in each market / Low cost of keeping the markets separate / No market seepage
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Definition of price mechanism
Free movement of price in response to S + D -------> Function 1: allocate scarce goods & services / Function 2: allocate scarce resources
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Elements of market failure
Monopoly (allocative inefficiency P>MC / Cannot provide public good through the market / Under-provides merit goods / Over-provides de-merit goods / Negative externalities
Toll roads / Congestion fees / Fuel taxes / Parking space tax / Build new roads
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Other cards in this set
Card 2
Front
Give 5 features of oligopoly
Back
Few large firms in industry with high concentration ratios / Interdependence / Price stability / Collusion-Cartels, price leaders / Non-price competition
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