Studied by 2 peoplecommodity
a product, such as petroleum or milk, that is considered the same no matter who produces or sells it
trust
an illegal grouping of companies that discourages competition, similar to a cartel
merger
when two or more companies join to form a single firm
cartel
a formal organization of producers that agree to coordinate prices and production
oligopoly
a market structure in which a few large firms dominate a market
franchise
a contract that gives a single firm the right to sell its goods within an exclusive market
patent
a license that gives the inventor of a new product the exclusive right to sell it for a specific period of time
monopoly
a market in which a single seller dominates
economies of scale
factors that cause a producer's average cost per unit to fall as output rises
differentiation
making a product different from other similar products
deregulation
the removal of government controls over a market
collusion
an illegal agreement among firms to divide the market, set prices, or limit production
license
a government-issued right to operate a business
perfect competition
a market structure in which a large number of firms all produce the same product and no single seller controls supply or price
natural monopoly
a market that runs most efficiently when one large firm supplies all of the output
government monopoly
a monopoly created by the government
price fixing
an agreement among firms to charge one price for the same good
predatory pricing
selling a product below cost for a short time to drive competitors out of the market
price war
a series of competitive price cuts that lowers the market price below the cost of production
non-price competition
a way to attract customers through style, service, or location, but not a lower price
barrier to entry
any factor that makes it difficult for a new firm to enter a market
imperfect competition
a market structure that fails to meet the conditions of perfect competition
start-up costs
the expenses a new business must pay before it can begin to produce and sell new goods
price discrimination
the division of consumers into groups based upon how much they will pay for a good
market power
the ability of a company to control prices and total market output
monopolistic competition
a market structure in which many companies sell products that are similar but not identical
anti-trust laws
laws that encourage competition in the marketplace
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