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When a market is dominated by a few large profitable firms it is considered to be a?
Wiki User
∙ 11y ago
oligopoly
Wiki User
∙ 11y ago
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At the most profitable level of production a firms marginal cost will be the market price?
equal to
Are profitable firms necessarily efficient firms?
yes
What type of industry with 20 firms has a concentration ratio of 30?
this would be considered to be a low Oligopoly market
Why some markets are dominated by large firms and others markets by small firms?
There are several different types of markets of firms. They go from a monoply (a firm which has 25% or more share of a market according to UK government) to oligopoly (a few large firms dominating the market) to monopolistic competition (many small firms in the market selling similar goods by differentiated to others by brands etc) and then perfect competition (lots of small firms selling exactly the same goods (carrot farmers etc.). Some are dominated by large firms for different reasons, the main one being a natural monopoly which is where the barriers to entry are very high (high set up costs etc) for example National Rail. It would be very expensive to lay down new railway tracks all around the country etc. Hope that help!
Why would the music industry be an example of an oligopoly?
The music industry is dominated by a few large firms which dominate the market, thus enabling the industry to exert its market influence. They also partake in collusion to ensure that barriers to entry into the music industry remain high for new firms to enter. The characteristics of an oligopoly are as follows: Few, large number of firms dominate the market. High barriers to entry Long run abnormal profits Price makers- have the ability to determine market price. Maximise profits where MC=MR. The music industry fits into the above characteristics and therefore is considered to be an oligopoly.
At the most profitable level of production a firms marginal cost will be the market price?
equal to
Are profitable firms necessarily efficient firms?
yes
What type of industry with 20 firms has a concentration ratio of 30?
this would be considered to be a low Oligopoly market
Why some markets are dominated by large firms and others markets by small firms?
There are several different types of markets of firms. They go from a monoply (a firm which has 25% or more share of a market according to UK government) to oligopoly (a few large firms dominating the market) to monopolistic competition (many small firms in the market selling similar goods by differentiated to others by brands etc) and then perfect competition (lots of small firms selling exactly the same goods (carrot farmers etc.). Some are dominated by large firms for different reasons, the main one being a natural monopoly which is where the barriers to entry are very high (high set up costs etc) for example National Rail. It would be very expensive to lay down new railway tracks all around the country etc. Hope that help!
Why would the music industry be an example of an oligopoly?
The music industry is dominated by a few large firms which dominate the market, thus enabling the industry to exert its market influence. They also partake in collusion to ensure that barriers to entry into the music industry remain high for new firms to enter. The characteristics of an oligopoly are as follows: Few, large number of firms dominate the market. High barriers to entry Long run abnormal profits Price makers- have the ability to determine market price. Maximise profits where MC=MR. The music industry fits into the above characteristics and therefore is considered to be an oligopoly.
What are the roles of households and firms in the market economy?
in a market economy, firms make the goods. Households buy the goods
What are the roles of household and firms a market economy?
in a market economy, firms make the goods. Households buy the goods
What are the rules of households and firms in a market economy?
In a market economy, firms make the goods. Households buy the goods.
What is markets in which firms sell their output of goods and services?
The product market is the market in which firms sell their output of goods and services.
In a free market economy firms purchase from households?
In a free market economy, firms purchase factors of production such as labor, from households.
The market structure that is characterized by a small number of large firms that have some market power is called?
The market structure that is characterized by a small number of large firms that have some market power is called
Explain the process that drives the economic profit to zero in the long run for a perfectly competitive firm?
In perfectly competitive markets, economic profits are zero in the long run because firms are able to enter and exit the market. If firms in a perfectly competitive market are profitable, there would be an incentive for new firms to enter. Supply would increase, causing an increase in quantity and the price to be driven back down to equilibrium: NO PROFIT! If firms in a perfectly competitive market are suffering a loss, some firms would choose to exit the market. Supply would decrease, causing a decrease in quantity and the price to be driven back up to equilibrium: NO PROFIT!
