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    I am confused with contestable markets are they the same as monopolistic competition or perfect competition or are they completely different? Please help me !
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    (Original post by dumbo1)
    I am confused with contestable markets are they the same as monopolistic competition or perfect competition or are they completely different? Please help me !
    They are different. A contestable market is where there are no barriers to entry/exit, they are exposed to hit and run competition, the cost to new and incumberent firms is equal, they earn normal profits in the long run and there is no brand loyalty. To some extent this could apply to having a field and deciding to open it for campers next to a festival.
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    (Original post by HillyH1995)
    don't answer it like the other people have told you to. you have to say it's when MC=MR and then draw the diagram of a monopolist and label the point of profit max (would be a 5 marker)
    Ah right ok thanks

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    (Original post by dumbo1)
    I am confused with contestable markets are they the same as monopolistic competition or perfect competition or are they completely different? Please help me !
    contestable markets: imperfectly competitive markets in which firms face real and potential competition. there are threats of hit and run due to an absence of sunk costs and the less costly entry and exit is, the more contestable the market is. a perfectly contestable market occurs when barriers to entry and cost are zero. firms behaviour is influenced by the threat of new entrants to the industry and although they can make supernormal profits, they limit profit made to discourage hit and run and discourage new entrants.

    monopolistic competition: a market structure which combines elements of monopoly and perfectly competitive markets. there is freedom to entry and exit as it is assumed there are no barriers to entry and exit, both producers and consumers have perfect knowledge and individual firms decide about sales levels, product design and the like without reference to the behaviors of potential competitors. Each firm operating under conditions of monopolistic competition will seek to make its product/service different to that of its competitors (product differentiation)

    perfect competition: consists of a large number of small firms in a highly competitive market. there is freedom to entry and exit, all firms produce an identical or homogeneous product, so all firms are price takers - the demand curve is perfectly elastic, and there is perfect knowledge of producers and consumers. abnormal profits may be made in the short run but in the long run competitors will be aware of these profits and increase production, while new entrants will boost supply, which will decrease price. a perfectly competitive firm is only able to make normal profits. market forces will ensure that costs and revenues in the long term are kept in balance, and there is efficiency in terms of minimising the average costs of production.


    If i've missed anything or have gotten something wrong please let me know!
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    What leisure market could you use as an example for monopolistic competition?
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    No one has answered yet and I really need to know

    "Analyse how, in theory, wages are determined in a competitive market" [15]
    "Discuss the extent to which the competitive labour market model is useful and relevant in explaining wage determination within contemporary real world labour markets" [20]

    this may sound so stupid but what is a competitive labour market? and is a competitive market just a perfectly competitive market?
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    Would section B ever have a leisure industry it's focused on or would it only ask to pick one of our choice??
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    (Original post by Zebra Stripe)
    What is equilibrium unemployment?
    This is the unemployment which exists when aggregate demand for labour (ADL) equals the aggregate supply of labour (ASL) at the going wage rate.
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    (Original post by sarbear282)
    No one has answered yet and I really need to know

    "Analyse how, in theory, wages are determined in a competitive market" [15]
    "Discuss the extent to which the competitive labour market model is useful and relevant in explaining wage determination within contemporary real world labour markets" [20]

    this may sound so stupid but what is a competitive labour market? and is a competitive market just a perfectly competitive market?
    A competitive labour market is where there is no intervention from government or trade unions, and wages are set where the demand for labour(MRP) meets the supply of labour - so you could talk about factors such as elasticity of labour where supply and demand are inelastic wages will be set higher than if supply and demand was elastic.

    You can talk about the theory of MRP, as wages are set where MRP=MCL, and changes in MRP lead to changes in wage rate

    However is real world markets, the tends to be intervention from the state such as NMW that raises wage rates of low paid workers above equilibrium, or Monopsony employers of labour where wages are set by the employer.
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    (Original post by kosky101)
    What leisure market could you use as an example for monopolistic competition?
    Tv broadcasting industry
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    (Original post by kosky101)
    What leisure market could you use as an example for monopolistic competition?
    there's evidence for all of them - however TV Broadcasting is a ****ing gem for these leisure market questions.
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    What 15/20 markers haven't yet come up on the paper? Does anyone have any ideas/predictions of what may come up on the paper?
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    (Original post by maaci)
    Would section B ever have a leisure industry it's focused on or would it only ask to pick one of our choice??
    always of your choice in part B.

    only reason it's specific in part A is because it relates to the extract
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    feel like I'm the only one using cinema as my specified leisure industry lol - anyone else out there?!
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    (Original post by kosky101)
    What leisure market could you use as an example for monopolistic competition?
    My teacher has regularly suggested short haul airlines for monopolistic competition (i.e. flights within Europe).
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    (Original post by Fas)
    there's evidence for all of them - however TV Broadcasting is a ****ing gem for these leisure market questions.
    would you mind briefly explaining the tv broadcasting thing? heard people saying its a great example a few times
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    (Original post by HillyH1995)
    you have to repeat yourself. asked my teacher this today. imagine you never wrote the part A.
    are you 100% sure? does that mean you can repeat your points again?
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    Can someone explain this Monopsony diagram? I'm not seeing any change compared to the typical labour market (i.e. MRP = MC of Labour)? It's one of the only diagrams I don't get.
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    (Original post by MTennison)

    Can someone explain this Monopsony diagram? I'm not seeing any change compared to the typical labour market (i.e. MRP = MC of Labour)? It's one of the only diagrams I don't get.
    The profit maximising level of employment is where mrp=mc, shown at wage rate MRPL on the diagram and employment level Eq. However, since a monopsony has market power they can profit maximise by employing the same number of workers where mrp=mc (employment level Eq), but at a lower wage rate of Wq rather than MRPL. This causes wages to be set below the wage rate in a competitive market, which would be where labour supply is equal to the demand for labour.
    So the difference in the diagrams is the wage rate that is set in a monopsony
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    (Original post by HillyH1995)
    feel like I'm the only one using cinema as my specified leisure industry lol - anyone else out there?!
    I used it in my mock with the june 2013 paper and got 88% so i might just stick to what i know if a question like that comes up again :yes:
 
 
 

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