Unit 3

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Across
  1. 2. Regulators may set this to industries to limit each year’s price increase to only RPI-x
  2. 7. a type of merger that occurs when two firms who have no common production interests merge
  3. 8. occurs when an incumbent firm sets a price so low that they earn normal profit (or low super-normal profit) to make rivals make a loss (because they are not as efficient)
  4. 12. occurs when two or more firms join together under common ownership
  5. 13. is the act of satisfying or sufficing different stakeholders
  6. 15. is where a doubling of inputs leads to a doubling of output
  7. 17. occurs at AR=AC, the firm breaks even and generates normal profits
  8. 18. are costs that vary directly with output
  9. 20. models interdependent firms in a duopoly with a pay-off matrix to recognize rival behaviour, strategies and a best solution
  10. 23. is the removal of government controls (red tape, laws and regulations) over markets
  11. 25. is the difference between revenue and costs
  12. 26. A firm experiences this when long-run average costs fall as output rises
Down
  1. 1. a type of strategy which uses methods such as advertising, marketing, branding and differentiation to increase competitive advantage
  2. 3. occurs when large firms in an oligopoly form a cartel to act as a monopoly to restrict output and raise prices
  3. 4. is the separation of a firm into two or more independent businesses
  4. 5. are perfect substitutes
  5. 6. a type of integration that occurs when a buyer buys a supplier and becomes closer to the raw materials in the supply chain
  6. 9. A firm is this if it has the power to set its price
  7. 10. occurs when a firm charges different consumers different prices for identical goods
  8. 11. is the minimum scale to fully benefit from economies of scale
  9. 14. is the sale of state-owned assets/enterprises/industries to the private sector
  10. 16. A firm is this when lack of competition leads to costs higher than they would be with competition
  11. 19. are costs that cannot be recovered upon exiting a market
  12. 21. is the only buyer in a market
  13. 22. occurs when there are a few large dominant firms, large firms are interdependent and there are significant entry/exit barriers
  14. 24. is money earned by a firm for selling its output