another econ test

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Market structure

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

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.

Industry

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

Perfect competition

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

Monopolistic competition

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

Product differentiation

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

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.

Oligopoly

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

Game Theory

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

Dominate Strategy

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

Nash Equilibrium

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

Collusion

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

Price-fixing

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

Monopoly

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

Laissez-faire

No taxes, regulations, or tariffs.

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.

Geographic monopoly

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

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.

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.

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.

Public good

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

Spillover effects

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

Externalities

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

Cost-benefit analysis

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

Trusts

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

Price discrimination

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

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.

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.

Unlimited liability

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

Inventory

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

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.

Limited Partnership

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

Corporation

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

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.

Stock

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

Stockholders

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

Dividend

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

Bond

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

Principal

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

Interest

The monetary charge for borrowing money

Double taxation

The taxing of shareholder dividends after taxation as corporate earnings.

Franchise

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

Franchisor

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

Franchisee

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

Income statement

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

Net income

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

Depreciation

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

Cash flow

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

Horizontal merger

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

Vertical merger

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

Conglomerate

A corporation made up of several different, independent businesses.

Multinational

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

Incubators

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

Venture capitalist

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

Angel investors

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

Crowdfunding

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

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.

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.

Credit union

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

Labor union

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

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.

Chamber of commerce

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

Better Business Bureau

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