3.4- Pricing Strategies and Contestable Markets

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  • Created by: 13clarken
  • Created on: 11-01-20 18:53
... to ... is a characteristic of a market that prevents new firms from readily joining the market
Barrier Entry
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... is a pricing policy whereby firms set their price by adding a mark- up to average cost
Cost Plus Pricing
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... is an anti-competitive strategy in which a firms sets price below average variable cost in an attempt to force a rival or rivals out of the market and achieve market dominance
Predatory pricing
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... is the highest price that an existing firm can set without enabling new firms to enter the market and make a profit
Limit Price
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A ... is a market in which the existing firm makes only normal profit, as it cannot set a higher price without attracting entry, owing to the absence of barriers to entry and sunk costs
Contestable Market
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Other cards in this set

Card 2

Front

... is a pricing policy whereby firms set their price by adding a mark- up to average cost

Back

Cost Plus Pricing

Card 3

Front

... is an anti-competitive strategy in which a firms sets price below average variable cost in an attempt to force a rival or rivals out of the market and achieve market dominance

Back

Preview of the front of card 3

Card 4

Front

... is the highest price that an existing firm can set without enabling new firms to enter the market and make a profit

Back

Preview of the front of card 4

Card 5

Front

A ... is a market in which the existing firm makes only normal profit, as it cannot set a higher price without attracting entry, owing to the absence of barriers to entry and sunk costs

Back

Preview of the front of card 5

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