Economic Concepts: Monopolies and Price Discrimination

Flashcards covering key vocabulary related to monopolies, economic behaviors, and price discrimination as discussed in the lecture.

Network Effects

The phenomenon where increased numbers of participants improve the value of a good or service.

Rent Seeking Behavior

The practice of manipulating public policy or economic conditions as a strategy to increase profits without creating new wealth.

X-Inefficiency

The condition where businesses do not operate at the lowest costs possible due to lack of competition.

Price Discrimination

Charging different prices to different groups of consumers not justified by cost differences.

Simultaneous Consumption

The ability for a product to be consumed by many people simultaneously, often at low marginal cost.

Monopoly Power

The power a company has to set prices above competitive levels due to lack of competition.

Fixed Cost

The costs that do not vary with the level of output, like a monthly connection fee.

Variable Cost

Costs that vary directly with the level of output, such as the cost of electricity used.

Technological Advance

Improvements or innovations in technology that can arise from competition.

Natural Monopoly

A type of monopoly that occurs when a single company can supply a product or service more efficiently than multiple competing firms.