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34 Cards in this Set
- Front
- Back
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When is a buyer NOT willling to spend a lot of time and energy researching the market?
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when the savings to be made are small
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What kind of market runs most efficiently when one large firm supplies all of the output?
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a natural monopoly
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What is one kind of monopoly that the U.S. government generally permits?
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professional sports leagues
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How does a company arrange to sell its products to people who are unwilling to pay the top price for them?
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by charging different prices according to the group to which the buyer belongs
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What is a monopolistic competition?
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many companies selling similar but not identical products
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Which of the following is NOT a form of nonprice competition?
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discounts
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What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?
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consumers will substitute a rival's product
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When the government deregulates a product or service, what happens to it?
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some government regulations over the industry are eliminated
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Cartels are difficult to operate for which of the following reasons?
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They work only if members keeep to their agreed output
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Why does the government sometimes give monopoly power to a company by issuing a patent?
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the company can then profit from their research without competition
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Which of the following is NOT a condition for perfect competition?
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sellers offer a wide variety of products
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How does natural monopoly function?
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a single firm supplies all the output
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Why are cartels difficult to operate successfully?
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they work only if members keep to their agreed output
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Which of the following industries have been deregulated in recent years?
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airlines
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Which of the following is a product that is considered a commodity?
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feed corn for cattle
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Which of the following is NOT a form of nonprice competition?
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discounts
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What is the definition of an oligopoly?
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two to four firms producing 70 percent to 80 percent of the output
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What is one effect that the internet has had on business?
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it has reduced start-up costs for many businesses
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oligopoly
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a market structure in which a few large firms dominate a market
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perfect competition
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a market structure in which a large number of firms all produce the same product
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price war
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a series of competitive price cuts that lowers the market price below the cost of production
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economies of scale
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factors that cause a producer's average cost per unit to fall as output rises
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trust
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an illegal grouping of companies that discourages competition
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franchise
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the right to sell a good or service within an exculusive market
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differentiation
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making a product unlike other products
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barrier to entry
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any factor that makes it difficult for a new firm to become part of a market
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merger
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combination of two or more companies into a single firm
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deregulation
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the removal of some government controls over a market
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monopoly
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a market dominated by a single seller
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patent
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a license that gives the inventor of a new product the exclusive right to sell it for a certain period of time
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start-up costs
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the expenses a firm must pay before it can begin to produce and sell goods
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price discrimination
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division of customers into groups based on how much they will pay for a good
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commodity
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a product that is considered the same no matter who produces it
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license
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a government-issued right to operate a business
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