Market structure

1. The characteristics of a market that determine the behaviour of firms, including the number of firms, product differentiation, and ease of entry/exit.
4. A market dominated by a few large firms, characterized by high concentration, interdependence, and potential for collusion or intense price competition.
6. A market structure with one dominant firm (or a high concentration ratio) facing high barriers to entry, enabling them to make supernormal profits.
7. The minimum reward required to keep factors of production in their current use (AR=AC).
8. Charging different prices to different consumers for the same good, based on price elasticity of demand.
11. A key feature of oligopoly where the actions of one firm (price changes, marketing) directly affect and provoke reactions from rivals.
12. Price equals marginal cost (P=MC), meaning resources are allocated according to consumer preferences.
13. (e.g., 4-firm/CR4): The total market share held by the n, largest firms, measuring the degree of oligopoly/monopoly power.

1. Profit above normal profit (AR>AC).
2. Producing at the lowest point on the average cost curve (MC=AC), minimizing resource wastage.
3. Many firms with low barriers to entry but differentiated products (e.g., branding), leading to normal profit in the long run.
5. Efficiency over time, achieved through investment in new technology/R&D, often requiring supernormal profits.
9. A market with low barriers to entry/exit and low sunk costs, where the threat of competition forces firms to behave competitively, regardless of the number of firms.
10. A theoretical market with many small firms, no barriers, homogeneous products, and perfect information, resulting in long-run normal profits.