Microeconomics 0.0 / 5 ? EconomicsgeneralCompetitive marketsA2/A-levelEdexcel Created by: lucyhannaford12Created on: 07-02-18 21:41 business objectives strong work incentive, productive workforce, longevity 1 of 27 internal economies of scale ways that businesses reduce costs e.g technology 2 of 27 principle-agent problem shareholders strong returns, managers market power and status 3 of 27 market power influence market price without losing high proportion of sales 4 of 27 price capping curtails monopoly power but distorts price mechanism 5 of 27 regulators ensure good customer service, lower barriers to entry, surrogate competition 6 of 27 anti-competitive behaviour price fixing, patent misuse, predatory/limit pricing 7 of 27 motivations for business growth sustain market power, reduce risk of hostile takeover, shareholder returns 8 of 27 problems with monopolies poor service, inefficiencies, welfare loss, higher prices 9 of 27 drivers of mergers/takeovers supply customers globally, low demand growth, economies of scale 10 of 27 collusion is easier when regulators weak, penalties low, similar objectives 11 of 27 supply of labour shifts inward migration of skilled workers, low qualifications, fall in substitute job pay 12 of 27 factors affecting labour supply wage rate, barriers to entry, job risk, anti-social hours 13 of 27 competitive markets low barriers, weak brand loyalty, lots of information 14 of 27 perfect competition evaluation dominance of brands, information gaps, patents 15 of 27 strategic interdependence one firms decisions influenced by likely behaviour of competitors 16 of 27 legal collusion improved industry standards, information sharing, innovation 17 of 27 collusion anti-competitive behaviour to maximise profits 18 of 27 breakdown of cartels free riders, whistle-blowing, break down of trust 19 of 27 elasticity of labour demand PED for final product, ease and cost of factor substitution 20 of 27 shifts in demand for labour rise in final demand, change in market price, subsidies 21 of 27 geographical immobility financial costs in moving, family ties, house prices variations 22 of 27 bargaining strength financial reserves, low no. of union members, number of branches 23 of 27 wage differentials skills, productivity, discrimination 24 of 27 improving labour mobility workplace training, higher living wage, apprenticeships 25 of 27 conditions of contestable market absence of sunk costs, low barriers to entry, low consumer loyalty 26 of 27 kinked demand price increase consumers switch to substitutes, price decrease rev falls 27 of 27
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