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Imperfect Competition
Market structure with inefficiencies present.
Perfect Competition
Market with many firms and identical products.
Monopolistic Competition
Many firms selling similar but differentiated products.
Oligopoly
Few dominant firms with high market concentration.
Monopoly
Single firm controls entire market output and price.
Price Taker
Firm that accepts market price without influence.
Price Maker
Firm that can set its own price.
Identical Product
Products that are perfect substitutes for each other.
Similar Product
Products that are not identical but closely related.
Unique Product
Product with no close substitutes available.
Barriers to Entry
Obstacles preventing new firms from entering market.
Allocative Efficiency
Resources allocated to maximize consumer satisfaction.
Productive Efficiency
Production at lowest possible cost.
Long-Run Equilibrium
Market condition where firms earn zero economic profit.
Natural Monopoly
Market structure due to economies of scale.
Fair Return Regulation
Pricing where price equals average total cost.
Socially Optimal Regulation
Pricing where price equals marginal cost.
Price Discrimination
Charging different prices to different consumers.
1st Degree Price Discrimination
Charging each customer maximum willingness to pay.
2nd Degree Price Discrimination
Charging different prices based on quantity purchased.
3rd Degree Price Discrimination
Charging different prices to different customer groups.
Nash Equilibrium
Situation where players have no incentive to deviate.
Dominant Strategy
Best strategy for a player regardless of others' actions.
Tacit Collusion
Implicit agreement among firms to avoid competition.
Note 
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