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27 Cards in this Set
- Front
- Back
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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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Commodity
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A product that is the same no matter who produces it, such as petroleum, notebook paper, or milk
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Barrier to Entry
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Any factor that makes it difficult for a new firm to enter a market
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Imperfect Competition
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A market structure that does not meet the conditions of perfect competition
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Start-up Costs
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The expense a firm must pay before it can begin to produce and sell goods
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Monopoly
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A market dominated by a single seller
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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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Natural Monoploy
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A market that runs most efficiently when one large firm supplies all of the ouput
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Goverment Monopoly
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A monopoly created by the government
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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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Franchise
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The right to sell a good or service within an exclusive market
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License
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A government-issued right to operate
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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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Market Power
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The ability of acompany to change prices and output like a monopolist
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Monopolistic Competition
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A market structure in which many companies sell products that are similar but not identical
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Differentiation
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Making a product different from other similar products
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Non Price Competition
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A way to attract customers through style, service, or location, but not a lower price
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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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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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Collusion
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An aggreement amoung firms to divide the market, set prices, and limit production
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Price Fixing
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An agreement amoung firms to charge one price for the same good
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Cartel
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A formal organization of producers that agree to coordinate prices and production
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Predatory Pricing
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Selling a product below cost to drive competitors out of the market
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Antitrust Laws
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Laws that encourage competition in the marketplace
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Trust
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Like a cartel, an illegal grouping of companies that discourages competition
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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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