Monopoly and Antitrust Policy

Flashcards covering key vocabulary terms related to Monopoly and Antitrust Policy.

Imperfectly competitive industry

An industry in which individual firms have some control over the price of their output.

Monopoly

Sole seller of a product without close substitutes.

Oligopoly

Only a few sellers offer similar or identical products.

Monopolistic competition

Many firms sell similar but not identical products—slightly different.

Perfectly competitive market

Many firms selling identical product, Price taker, no market power, P=MC=MR, a small part of the market

Pure Monopoly

An industry with a single firm that produces a product for which there are no close substitutes and in which significant barriers to entry prevent other firms from entering the industry to compete for profits.

Natural monopoly

A single firm can produce the entire market Q at lower cost than could several firms.

Price discrimination

Charging different prices to different buyers for identical products.

Perfect price discrimination

Occurs when a firm charges the maximum amount that buyers are willing to pay (WTP) for each unit.