Studied by 1 person
market structure
the amount of competition for a good or service
perfect competition
numerous buyers and sellers
-each seller has some market share
-no 1 buyer or seller can affect the price
monopoly
a single seller controls the supply in the entire industry for a good or service, and thus sets the price
barriers to entry
obstacles that prevent a competitor from entering the market for a good or service
economies of scale
due to their large size of output, they can produce the good/service for a very low cost
patent
exclusive right to make, use, or sell an invention for a period of years (20 years)
copyright
exclusive right to sell, publish, or reproduce creative works for a period of years (life of the author + 70 years, or 95 years after publication)
oligopoly
an industry dominated by a small number of suppliers who have some control over price
product differentiation
manufacturers’ use of minor differences in quality and features of similar goods and services
interdependence
any change on the part of one firm will cause a reaction on the part of other firms in the oligopoly
collusion
some companies may secretly agree to raise prices
cartel
arrangement among businesses to reduce competition by controlling price, production, and distribution of goods
monopolistic competition
a large number of sellers offer similar but slightly different products and have some control over price
interlocking directorates
a member of a Board of Directors for one company also serves on the Board for a competing company
antitrust legislation
aimed to prevent monopolies from forming and break up current monopolies
merger
legal combination of two or more companies that become one corporation
horizontal merger
merging companies are in the same industry
vertical merger
when companies involved in a “chain of supply” merge together
conglomerate
a large corporation is involved in at least four or more unrelated businesses
deregulation
reduction of government rules and regulations in businesses
Note
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