Economics Ch 25

Unique product

- the good or service supplied has no substitute.

strict set of requirements

Economists use a(n) to characterize a monopoly.

Unique product

- the good or service supplied has no substitute.

strict set of requirements

Economists use a(n) to characterize a monopoly.

Barriers

to entry are the principle condition that allows monopolies to exist.

single supplier

A monopoly is a market in which a(n) provides a unique product to any number of buyers.

Disposable factories

and disposable strategies are new keys to lowering costs and boosting performance.

Monopolies

form when barriers prevent competitors from entering the market.

monopolistic competition

Because distinctions can be made among goods sold in , firms engage in non- price competition in addition to competing on price.

Competition

in perfectly competitive markets promotes efficient use of resources and the lowest possible prices.

profitable firms

An oligopoly is a market dominated by a few large, that sell differentiated products and have some control over price.

Monopolies

may use price discrimination to increase sales.

unique product

the good or service supplied has no substitute

Economies of scale

characteristics that cause a producers average cost to drop as production rises

Example

public water

commodity

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