19 Market Power Lecture Notes

This set of flashcards covers key concepts related to market power, competition, and economic principles discussed in the lecture.

Market Power

The ability a firm has to raise the price it charges without losing all its business.

Perfect Competition

A market structure characterized by a single good of uniform quality, many buyers and sellers, none of whom can control the price.

Price-taker

A firm that cannot influence the market price and must accept it as given.

Monopoly

A market structure where there is a single seller of a good.

Oligopoly

A market structure where there are few large sellers of a good.

Monopolistic Competition

A market structure where there are many sellers offering differentiated products.

Marginal Revenue (MR)

The additional revenue a firm gains from selling one more unit of a good.

Output Effect

The revenue gained from selling an additional unit.

Discount Effect

The loss in revenue per unit when a firm lowers its price to sell additional units.

Antimonopoly Rules

Laws designed to promote competition and prevent monopolies in the market.

Natural Monopoly

A market structure where a single firm is most efficient to serve the entire market.