________: industry structure in which a large number of firms produce slightly differentiated products that are reasonably close substitutes for one another.
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Market power
________: firm's ability to raise the price of a good without losing all its sales.
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monopolist
Perfectly discriminating ________: firm that charges each buyer exactly his or her reservation price.
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Oligopoly
________: industry structure in which a small number of large firms produce products that are either close or perfect substitutes.
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Pure monopoly
________: the only supplier of a unique product with no close substitutes.
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level of output
A monopolist will earn an economic profit only if price exceeds average total cost at the profit- maximizing ________.
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Price setter
________: firm with at least some latitude to set its own price.
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Natural monopoly
________: monopoly that results from economies of scale (increasing returns to scale)
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Perfect hurdle
________: threshold that completely segregates buyers whose reservation prices lie above it from others whose reservation prices lie below it, imposing no cost on those who jump the hurdle.
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Price setter
firm with at least some latitude to set its own price
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Pure monopoly
the only supplier of a unique product with no close substitutes
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Monopolistic competition
industry structure in which a large number of firms produce slightly differentiated products that are reasonably close substitutes for one another
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Oligopoly
industry structure in which a small number of large firms produce products that are either close or perfect substitutes
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Market power
firm's ability to raise the price of a good without losing all its sales
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Constant returns to scale
production process is said to have constant returns to scale if, when all inputs are changed by a given proportion, output changes by the same proportion
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Increasing returns to scale = economies of scale
production process is said to have increasing returns to scale if, when all inputs are changed by a given proportion, output changes by more than that proportion
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Natural monopoly
monopoly that results from economies of scale (increasing returns to scale)
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Marginal revenue
change in a firm's total revenue that results from a one-unit change in output
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Price discrimination
practice of charging different buyers different prices for essentially the same good/service
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Perfectly discriminating monopolist
firm that charges each buyer exactly his or her reservation price
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Hurdle method of price discrimination
practice by which a seller offers a discount to all buyers who overcome some obstacle
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Perfect hurdle
threshold that completely segregates buyers whose reservation prices lie above it from others whose reservation prices lie below it, imposing no cost on those who jump the hurdle
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Price setter
Firm with at least some latitude to set its own price
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Pure monopoly
The only supplier of unique product with no close substitutes
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Monopolistic competition
Industry structure in which a large number of firms produce slightly differentiated products that are reasonably close substitutes for one another
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Oligopoly
Industry structure in which a small number of large firms produce products that are either close or perfect substitutes
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Market power
Firm's ability to raise the price of a good without losing all its sales
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Constant returns to scale
Production process is said to have constant returns to scale if, when all inputs are changed by a given proportion, output changes by the same proportion
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Increasing returns to scale = economies of scale
Production process is said is to have increasing returns to scale if, when all inputs are changed by given proportion, output changes by more than that proportion
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Natural monopoly
Monopoly that results from economies of scale (increasing returns to scale)
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Marginal revenue
Change in a firm's total revenue that results from a one-unit change in output
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Price discrimination
Practice of charging different buyers different prices for essentially the same good/service
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Perfectly discriminating monopolist
Firm that charges each buyer exactly his/her reservation price
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Hurdle method of price discrimination
Practice by which a seller offers a discount to all buyers who overcome some obstacle
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Perfect hurdle
Threshold that completely segregates buyers whose reservation prices lie above it from others whose reservation prices lie below it, imposing no cost on those who jump the hurdle
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Flashcard (23)