Definitions

Question 1

Perfect competition

Answer 1

Market with many buyers and sellers

Question 2

Monopolistic competition

Answer 2

Imperfect competition with many firms

Question 3

Oligopoly

Answer 3

Imperfect competition among a few firms

Question 4

Duopoly

Answer 4

2 firms

Question 5

Monopoly

Answer 5

1 firm

Question 6

Market share

Answer 6

Proportion of sales in a market

Question 7

Hit and run entry

Answer 7

When firms renter a market to make ecnomics profit and leave once it’s been competed away

Question 8

Competition policy

Answer 8

Aimed to reducing monopoly power in order to protect consumers

Question 9

Competition policy

Answer 9

Policy that the government uses to promote competition in market and protect consumer by preventing abuses of market power

E.g regulation, subsidies reducing regulation and increasing licenses