Studied by 2 peopleMonopolistic competition
________: industry structure in which a large number of firms produce slightly differentiated products that are reasonably close substitutes for one another.
Market power
________: firm's ability to raise the price of a good without losing all its sales.
monopolist
Perfectly discriminating ________: firm that charges each buyer exactly his or her reservation price.
Oligopoly
________: industry structure in which a small number of large firms produce products that are either close or perfect substitutes.
Pure monopoly
________: the only supplier of a unique product with no close substitutes.
level of output
A monopolist will earn an economic profit only if price exceeds average total cost at the profit- maximizing ________.
Price setter
________: firm with at least some latitude to set its own price.
Natural monopoly
________: monopoly that results from economies of scale (increasing returns to scale)
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.
Price setter
firm with at least some latitude to set its own price
Pure monopoly
the only supplier of a unique product with no close substitutes
Monopolistic competition
industry structure in which a large number of firms produce slightly differentiated products that are reasonably close substitutes for one another
Oligopoly
industry structure in which a small number of large firms produce products that are either close or perfect substitutes
Market power
firm's ability to raise the price of a good without losing all its sales
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
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
Natural monopoly
monopoly that results from economies of scale (increasing returns to scale)
Marginal revenue
change in a firm's total revenue that results from a one-unit change in output
Price discrimination
practice of charging different buyers different prices for essentially the same good/service
Perfectly discriminating monopolist
firm that charges each buyer exactly his or her reservation price
Hurdle method of price discrimination
practice by which a seller offers a discount to all buyers who overcome some obstacle
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
Price setter
Firm with at least some latitude to set its own price
Pure monopoly
The only supplier of unique product with no close substitutes
Monopolistic competition
Industry structure in which a large number of firms produce slightly differentiated products that are reasonably close substitutes for one another
Oligopoly
Industry structure in which a small number of large firms produce products that are either close or perfect substitutes
Market power
Firm's ability to raise the price of a good without losing all its sales
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
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
Natural monopoly
Monopoly that results from economies of scale (increasing returns to scale)
Marginal revenue
Change in a firm's total revenue that results from a one-unit change in output
Price discrimination
Practice of charging different buyers different prices for essentially the same good/service
Perfectly discriminating monopolist
Firm that charges each buyer exactly his/her reservation price
Hurdle method of price discrimination
Practice by which a seller offers a discount to all buyers who overcome some obstacle
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
Note 
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