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Market power
ability possessed by all price-setting firms to raise price without losing all sales, which causes the price-setting firm's demand to be downward-sloping
Monopoly
firm that produces a good for which there are no close substitutes in a market that other firms r prevented from entering because of a barrier to entry
Monopolistic competition
market consisting of a large # of firms selling a differentiated product w low barriers to entry
Market definition
identification of the producers n products that compete for consumers in a particular geographic area
Learner index
ratio that measures the proportionate amt by which price exceeds marginal cost: (P-MC)/P
Strong barrier to entry
condition that makes it difficult for new firms to enter a market i/w economic profits r being earned
Switching costs
costs consumers incur when they switch to new/different products/services
Consumer lock-in
high switching costs make previous consumption decisions very costly to change
Network externalities (or network effects)
when the benefit/utility a consumer derives from consuming a good depends positively on the # of other consumers who use the good
Marginal revenue product (MRP)
additional rev attributable to hiring one additional unit of the input, which is also equal to the product of marginal revenue times marginal product; MRP = MR x MP
Total marginal cost curve (MCbaseT)
hor summation of all plants' marginal cost curves, which gives the addition to total cost attributable to increasing total output (QbaseT) by one unit
