A merger between 2 firms, within the same industry, operating at the same stage of production. What type of merger is this?
Vertical
Horizontal
Conglomerate
Forward Vertical
Backward Vertical
A merger between 2 firms in entirely unrelated industries. What type of merger is this?
A merger between 2 firms, within the same industry, operating at different stages of production. What type of merger is this?
Why do firms remain small?
Gain expertise
Barriers to Entry/Exit
Niche-Market Businesses
Lack of resources
Lack of motivation
Benefit from greater profits
Increase sales
Why do firms grow?
Increase market share
Gain power
Avoid attention from potential buyers
Productive efficiency occurs...
at the lowest point of the average cost curve
when the cost of production and the demands of consumers are taken into account to maximise welfare
How can productive efficiency be shown on a diagram?
P=MC
MC=AC
Allocative efficiency occurs...
How can allocative efficiency be shown on a diagram?
Profit maximisation occurs where...
AC=AR
MC=MR
MR=0
AR=MR
Revenue maximisation occurs where...
MR=AR
Sales maximisation occurs where...
Which one best describes Perfect Competition?
High Barriers to Entry/Exit
Imperfect knowledge
Few large firms dominate
Homogenous products
Which one best describes Monopolistic Competition?
Low concentration ratio
Perfect knowledge
No barriers to Entry/Exit
Which one best describes Oligopoly?
Many small firms
High barriers to Entry/Exit
Unique products
Which one best describes Monopoly?
Perfect Knowledge
Low barriers to Entry/Exit
How do you calculate Average Fixed Costs?
Fixed Costs/Output
Variable Costs/Output
Fixed Costs/Price
Variable Costs/Price
How do you calculate Average Variable Costs?
How do you calculate Marginal Costs?
Change in Total Costs/ Change in Quantity
Change in Quantity/ Change in Total Costs
Change in Fixed Costs/ Change in Quantity
Change in Variable Costs/ Change in Quantity
How do you calculate Total Revenue?
Price x Quantity
Total Costs x Quantity
(Price x Quantity)/ Quantity
Total Revenue/ Quantity
How do you calculate Average Revenue?
Fixed Costs/ Quantity
Variable Costs x Quantity
