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Monopoly
Question | Answer |
---|---|
Name 4 characteristics of a monopoly | One supplier. Controls quantity or price. Seeks to maximise profit. Barriers to entry exist. |
Name 8 barriers to entry | Legal monopoly. Patent ownership. Ownership of raw material. Economies of scale. Cartels. Mergers. Brand loyalty. |
Is SNP earned in the long run in a monopoly? | Yes |
Name 5 advantages of a monopoly market structure | Economies of scale. Guaranteed supply. Secure employment. No duplication, less waste of scarce resources. R&D potential. |
Name 5 disadvantages of a monopoly market structure | Exploitation of customers. Inefficient use of scarce resources. Production of fewer goods at higher prices. Less innovation |
What regulates monopolies? | Competition act 2002 |
Name three divisions set up by the Competition act 2002 | Monopolies division. Cartels division. Mergers division. |
Define deregulation | The removal of government controls from an industry or sector to allow for a free and efficient market place |
Name three things affected by deregulation | Fall in prices for consumers. Job risks for employees. Profits may fall for monopolies. |
How can state companies increase efficiency? | Appoint experienced entrepreneurs. Performance related pay. Deregulation. Allow companies to form alliances. Discontinue unprofitable services. Privatisation. Limit government interference. |
Define privatisation | Sale of state companies to private companies |
Define nationalisation | The purchase of private companies by the state |