Chapter 9 Terms
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20 Terms
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market structure
the amount of competition for a good or service
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perfect competition
numerous buyers and sellers
\-each seller has some market share
\-no 1 buyer or seller can affect the price
\-each seller has some market share
\-no 1 buyer or seller can affect the price
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monopoly
a single seller controls the supply in the entire industry for a good or service, and thus sets the price
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barriers to entry
obstacles that prevent a competitor from entering the market for a good or service
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economies of scale
due to their large size of output, they can produce the good/service for a very low cost
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patent
exclusive right to make, use, or sell an invention for a period of years (20 years)
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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)
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oligopoly
an industry dominated by a small number of suppliers who have some control over price
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product differentiation
manufacturers’ use of minor differences in quality and features of similar goods and services
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interdependence
any change on the part of one firm will cause a reaction on the part of other firms in the oligopoly
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collusion
some companies may secretly agree to raise prices
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cartel
arrangement among businesses to reduce competition by controlling price, production, and distribution of goods
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monopolistic competition
a large number of sellers offer similar but slightly different products and have some control over price
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interlocking directorates
a member of a Board of Directors for one company also serves on the Board for a competing company
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antitrust legislation
aimed to prevent monopolies from forming and break up current monopolies
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merger
legal combination of two or more companies that become one corporation
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horizontal merger
merging companies are in the same industry
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vertical merger
when companies involved in a “chain of supply” merge together
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conglomerate
a large corporation is involved in at least four or more unrelated businesses
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deregulation
reduction of government rules and regulations in businesses
Note 
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