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Market structure

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Economics

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63 Terms

1

Market structure

How different industries are classified and differentiated based on their degree and nature of competition for goods and services.

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2

Pure competition

A marketing situation in which there are a large number of sellers of a product which cannot be differentiated and, thus, no one firm has a significant influence on price.

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3

Industry

Group of productive enterprises or organizations that produce or supply goods, services, or sources of income.

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4

Perfect competition

An imaginary market condition where all consumers have access to the same products and information.

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5

Monopolistic competition

When many companies offer competing products or services that are similar, but not perfect, substitutes.

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6

Product differentiation

A process used by businesses to distinguish a product or service from other similar ones available in the market.

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7

Non-price competition

A strategy that implies attracting customers and increasing sales by providing superior product quality, a unique selling proposition, a great location, and excellent service rather than lower prices.

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8

Oligopoly

A market in which the industry is dominated by a few companies that are each influential participants in the market.

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9

Game Theory

A mathematical concept that seeks to identify optimal decisions among competing players.

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10

Dominate Strategy

A strategy that guarantees the player the highest payoff or outcome, regardless of what the other players do.

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11

Nash Equilibrium

Nothing is gained if any of the players change their strategy while all of the other players maintain their strategy.

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12

Collusion

A non-competitive, secret, and sometimes illegal agreement between rivals which attempts to disrupt the market's equilibrium.

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13

Price-fixing

An agreement (written, verbal, or inferred from conduct) among competitors to raise, lower, maintain, or stabilize prices or price levels.

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14

Monopoly

A market structure where a single seller or producer assumes a dominant position in an industry or a sector.

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15

Laissez-faire

No taxes, regulations, or tariffs.

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16

Natural monopoly

A type of monopoly in an industry or sector with high barriers to entry and start-up costs that prevent any rivals from competing.

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17

Geographic monopoly

When one company has exclusive rights to operate within a certain geographic area

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18

Technological monopoly

The monopoly where a single firm controls manufacturing methods necessary to produce a certain product, or has exclusive rights over the technology used to manufacture it.

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19

Government monopoly

A form of coercive monopoly in which a government agency or government corporation is the sole provider of a particular good or service and competition is prohibited by law.

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20

Market failure

The inefficient distribution of resources that occurs when the individuals in a group end up worse off than if they had not acted in rational self-interest.

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21

Public good

A commodity or service that is made available to all members of society.

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22

Spillover effects

The impact that seemingly unrelated events in one nation can have on the economies of other nations.

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23

Externalities

An indirect cost or benefit to an uninvolved third party that arises as an effect of another party's activity.

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24

Cost-benefit analysis

A way to compare the costs and benefits of an intervention, where both are expressed in monetary units.

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25

Trusts

The case of one person holding the title of property, whether land or chattels, for the benefit of another, termed a beneficiary.

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26

Price discrimination

A sales strategy of selling the same product or service to different customers for different prices.

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27

Economies of scale

occurs when more units of a good or service can be produced on a larger scale with (on average) fewer input costs.

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28

Sole proprietorship

An enterprise owned exclusively by one natural person and in which there is no legal distinction between the owner and the business entity.

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29

Unlimited liability

When one or more business owners or partners are liable for their company's debts and tax compliance.

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30

Inventory

All the items, goods, merchandise, and materials held by a business for selling in the market to earn a profit.

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31

General partnership

A business arrangement by which two or more individuals agree to share responsibilities, assets, profits, and financial and legal liabilities of a jointly-owned business.

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32

Limited Partnership

A type of partnership organization that limits the personal liability of some partners.

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33

Corporation

A legal entity that is separate and distinct from its owners.

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34

Charter

Documents that bind a company's objectives and goals, be it non-profit or for-profit status, full registered name, and location of the company's representative.

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35

Stock

A share in the ownership of a company, including a claim on the company's earnings and assets.

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36

Stockholders

The owners of a company's outstanding shares, which represents a residual portion of the corporation's assets and earnings

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37

Dividend

A share of profits and retained earnings that a company pays out to its shareholders and owners.

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38

Bond

A fixed-income instrument that represents a loan made by an investor to a borrower

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39

Principal

The amount of money a company borrows when it takes a loan.

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40

Interest

The monetary charge for borrowing money

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41

Double taxation

The taxing of shareholder dividends after taxation as corporate earnings.

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42

Franchise

A business whereby the owner licenses its operations—along with its products, branding, and knowledge for a fee.

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43

Franchisor

sells the right to open stores and sell products or services using its brand, expertise, and intellectual property.

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44

Franchisee

The individual who purchases the right to sell the franchisor's goods or services using its existing business model and trademark.

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45

Income statement

A financial statement that shows you the company's income and expenditures.

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46

Net income

The amount an individual or business makes after deducting costs, allowances and taxes.

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47

Depreciation

A measure of the amount of value an asset loses from influential factors affecting its market value.

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48

Cash flow

The net cash and cash equivalents transferred in and out of a company.

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49

Horizontal merger

Occurs when companies operating in the same or similar industry combine together.

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50

Vertical merger

Occurs when two or more firms, operating at different levels within an industry's supply chain, merge operations.

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51

Conglomerate

A corporation made up of several different, independent businesses.

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52

Multinational

A company that has business operations in at least one country other than its home country.

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53

Incubators

A facility designed to nurture and accelerate the growth of new businesses.

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54

Venture capitalist

An investor who provides young companies with capital in exchange for equity.

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55

Angel investors

High-net-worth individuals who invest their own money directly in emerging businesses.

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56

Crowdfunding

The use of small amounts of capital from a large number of individuals to finance a new business venture.

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57

Nonprofit organization

A group organized for purposes other than generating profit and in which no part of the organization's income is distributed to its members, directors, or officers.

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58

Cooperative (co-op)

A user- owned and controlled business from which benefits are derived and distributed equita- bly on the basis of use or as a business owned and controlled by the people who use its services.

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59

Credit union

A not-for-profit financial institution that accepts deposits, make loans, and provides a wide array of other financial services and products.

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60

Labor union

An organization of workers that negotiates with employers over wages and working conditions.

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61

Collective bargaining

A voluntary process used to determine terms and conditions of work and regulate relations between employers, workers and their organizations, leading to the conclusion of a collective agreement.

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62

Chamber of commerce

An organization of business owners and entrepreneurs who promote the interests of their local business community.

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63

Better Business Bureau

A private organization that provides the public with information on businesses and charities.

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