Market Structures Business Administration Core Vocabulary

Barriers to Entry

Obstacles that make it difficult for new firms to enter a market.

Competition

The rivalry among businesses for customers.

Contestable Market

A market where entry and exit are relatively easy.

Demand Curve

A graph showing the relationship between price and quantity demanded.

Differentiation

Making a product distinct from competitors’ products.

Economies of Scale

Cost advantages gained as production increases.

Elastic Demand

Demand that is sensitive to price changes.

Inelastic Demand

Demand that is not very responsive to price changes.

Market

A system where buyers and sellers exchange goods or services.

Market Concentration

Degree to which a small number of firms dominate a market.

Market Power

Ability of a firm to influence price.

Monopolistic Competition

Market structure with many firms selling similar but differentiated products.

Monopoly

Market structure with one seller controlling the entire market.

Natural Monopoly

Monopoly occurring due to high infrastructure costs or efficiency.

Oligopoly

Market structure with a few large firms dominating the market.

Perfect Competition

Market structure with many sellers offering identical products and no control over price.

Price Maker

A firm that has control over setting prices.

Price Taker

A firm that must accept market prices.

Product Differentiation

Distinguishing products through branding, quality, or features.

Substitutes

Products that can replace one another.

Supply Curve

A graph showing relationship between price and quantity supplied.