Economies of scale are the reductions in costs that result from producing goods in large quantities.
The equilibrium price is where demand and supply are equal.
A monopoly exists where there is only one seller in the market.
The Competition and Consumer Protection Commission (CCPC) is the State agency responsible for promoting fair competition in the marketplace and protecting the interests of consumers.
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An oligopoly is a market that is dominated by a few very large suppliers.
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Deregulation (or market liberalisation) is where governments remove barriers such as laws or restrictions that make it difficult for producers to enter or compete in a market.
Key Concepts
1. (a) Explain what is meant by a competitive market. (b) Explain why prices tend to be lower in a competitive market. (c) Name and explain two advantages and two disadvantages of a competitive market.
2. (a) Explain what is meant by economies of scale. (b) Explain what is meant by market liberalisation (or deregulation).
3. (a) What is the effect on price when there are a lot of sellers in the market? Explain why this effect occurs.
(b) What is the effect on price when there are very few sellers in the market? Explain why this effect occurs.
4. (a) Explain what is meant by a monopoly. (b) Explain what is meant by an oligopoly. (c) What is the role of the Competition and Consumer Protection Commission?
