Chapter 7 - The Economics of Big Business

Businesses

can be big in the sense of making a high percentage of all the sales in their industries.

Cartel

a group of businesses which agree among themselves to charge higher prices or otherwise avoid competing with one another.

Corporation

has a separate legal identity, so that the individual owners of the corporation are not personally liable for its financial obligations.

Corporate governance

Executives are put in charge of corporate management, hired and if need be fired by a board of directors who hold the ultimate authority in a corporation.

Monopoly

means literally one seller

Cartel

Where there is a formal organization in an industry to set prices and output

Monopolist

produces less output than a competitive industry would produce with the same available resources, technology and cost conditions.