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Market Failure
When competition breaks down, leading to inefficiencies and negative consequences for consumers and society.
Monopoly
A market with a single dominant seller, reducing consumer choice and allowing price manipulation.
Oligopoly
A market controlled by a few large firms, leading to reduced competition.
Monopsony
A market where a single buyer dominates, giving it control over pricing for suppliers.
Oligopsony
A market where a few buyers dominate, reducing supplier pricing power.
Predatory Pricing
A strategy where a dominant firm temporarily lowers prices to drive competitors out of business before raising them again.
Natural Monopoly
A market where a single provider is most efficient due to high infrastructure costs and economies of scale.
Regulated Competition
Government intervention to oversee monopolies and ensure fair pricing.
Collusion and Price-Fixing
When firms conspire to set prices or divide markets, eliminating competition.
Market Leverage
The ability of dominant firms to exploit their market power to maximize profits at the expense of consumers and suppliers.
Information Asymmetry
When one party in a transaction has more or better information than the other, leading to unfair advantages.
Adverse Selection
A phenomenon where lack of information leads to high-quality goods being driven out of the market by lower-quality alternatives.
Moral Hazard
When one party takes excessive risks because they do not bear the full consequences, often due to hidden information.
Excludability
The ability to prevent non-paying individuals from using a good or service.
Free Riders
People who benefit from a public good without contributing to its cost.
Tragedy of the Commons
The overuse and depletion of a commonly shared resource due to a lack of regulation.
Antitrust Law
Laws designed to promote competition and prevent monopolies or unfair business practices.
Platform Markets
Digital marketplaces where a dominant company can control access to users.
Economies of Scale
Cost advantages that firms experience as their output increases.
Infrastructure Investment
Expanding facilities like charging stations necessary for electric vehicle adoption.
Government Regulation
Laws and policies implemented to correct market failures.
Market Incentives
Policies that encourage specific behavior in the marketplace, such as tax credits for EV adoption.
Negative Externalities
Unaccounted costs for the community that arise from an individual party's actions, such as pollution.
Positive Externalities
Benefits that affect third parties not involved in the transaction, such as improved air quality from EVs.
