Competition

Question 1

Low competition benefits (3)

Answer 1

1. Ability to raise prices
2. Customers coming back
3. High sales and revenues

Question 2

Low competition drawbacks (2)

Answer 2

1. Less efficiency
2. Less choice for consumers

Question 3

High competition benefits (4)

Answer 3

1. Constant need for innovation
2. Increased productivity and efficiency
3. Easier to enter the market
4. Differentiation of product without price changing

Question 4

High competition drawbacks (2)

Answer 4

1. Consumers can easily switch to other businesses
2. Need to follow trends inside the market - price trends

Question 5

Monopoly (5)

Answer 5

1. Firm that has more than 25% of market
2. No competition
3. Ability to set prices
4. Often low efficiency
5. Might struggle with level of supply

Question 6

Oligopoly (4)

Answer 6

1. Market is shared by few firms with high market share
2. Low levels of competition
3. High barriers to enter a market
4. Interdependence of firms

Question 7

Monopolistic competition (4)

Answer 7

1. Presence of many companies
2. Produces similar products
3. Free entry and exit
4. Compete based on price, quality, design

Question 8

Competition -

Answer 8

• the contest between firms for customers; businesses that sell similar products

Question 9

Being competitive -

Answer 9

• demand that each firm attempts to address consumer’s concerns

Question 10

Monopolistic competition -

Answer 10

• many small firms sell a similar but differentiated products

Question 11

Oligopoly -

Answer 11

• few big firms that have the biggest market share

Question 12

Monopoly -

Answer 12

• business that owns at least 25% of the market or more