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What are the number of businesses in Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly?
- Perfect Competition- Many
- Monopolistic Competition- Many
- Oligopoly- few sell majority of products
- Monopoly- one
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Barriers to entry for Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly?
- Perfect Competition- none
- Monopolistic Competition- low
- Oligopoly- high
- Monopoly- very high
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Product differences of for markets?
- Perfect Competition- none
- Monopolistic Competition- some
- Oligopoly- some
- Monopoly- none
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What are forms of competition between four markets?
- Perfect Competition- lower prices
- Monopolistic Competition- lower prices, ads, R&D
- Oligopoly- ads, R&D
- Monopoly- ads, R&D
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What are examples of Perfect Competition?
wheat, corn
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What is an example of monopolistic competition?
pizza places in Concord
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What are two examples of oligopoly?
- phone companies
- airline companies
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What would happen if there was there was price competition in oligopolies?
a price war would begin
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What are two examples of monopolies?
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What is the Law of Demand?
The higher th eprice the smaller the quantity demanded?
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What are complements?
price of products used together
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What are the five components besides price in the Law of Demand?
- Income
- Substitutes
- Complements
- Tastes&Preferences
- Expectations
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What is the Law of Supply?
The higher the price the larger the quantitiy supplied
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What are the two components in the Law of Supply besides prices
- Costs to produce product
- Expectations
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What is equilibrium?
When quantity consumers are willing and able to buy equals the quantity that producers are able and willing to sell.
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What is surplus?
When quantity supplied exceeds demanded.
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What is shortage?
When quantity demanded exceeds quantity supplied.
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What is one advantage and disadvantage of sole proprietorships?
- advantage- owner keeps all profit
- disadvantage- unlimited personal liability
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What is the difference between gereral partnerships and limited partnerships?
- general- liability is shared
- limited-one person has full liability
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What is an advantage and disadvantage of partnerships?
- higher ability to raise finaicial capital
- profits must be shared
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What is a corporation?
Legal entity. Has legal rights and responsibilties as if it were a person.
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What are the three steps to becoming a coporation?
- 1) get state charter
- 2) issue stocks
- 3) elect board of directors
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what are two adavantages and two disadvantages of corporations?
limited liability, skilled specialized management
owners have less control, double taxation
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What is a franchise?
A business granted the right to sell a company's products in a certain area
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What is collusion?
Agreement in which companies restrict production to raise prices and profits.
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What is the difference between Vertical, Horizontal and Conglomerate Mergers?
- Vertical- combo of companies in different steps of production
- Horizontal- combo of companies in same business
- Conglomerate- combo of unrelated companies
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What are the four Ps in marketing?
- Product
- Price
- Promotion
- Place
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What is Merket Supply?
The total of all individual products in a market.
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What happens to the price of a product in a shortage?
It goes up
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What happens to the price of a product in a surplus?
It goes down
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What is the SEC and what does it do?
Security and Exchange Commission. It protects investors in the sale of stocks and bonds.
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What does the invisible hand refer to?
the fact that market finds equilibrium price through the independent and voluntary actions of buyers and sellers
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