econ ch6 l1 ch7 l1 l3

price

the monetary value of items

neutral

they favor neither the producer or consumer

criteria

a principle or standard

rationing

a system under which government decides everyone's fair share

biofuels

fuels whose energy is from renewable (corn)

market structure

a classification that describes the nature and degree of competition

pure competition

theoretical market with very large numbers, identical products, and freedom of entry and exit

perfect competition

competition with no complications (perfect knowledge and perfect mobility of resources)

monopolistic competition

has all of the condition of pure except for identical products

product differentiation

the differences (perceived) between competing products in the same industry

oligopoly

very large sellers dominate the industry

nonprice competition

the use of a brand name, giveaways, or other promotions

collusion

a formal or informal agreement to set specific prices

price

fixing

natural monopoly

one in which a single firm can product the product more cheaply

geographic monopoly

based on the absence of other sellers in a certain geographic area

technological monopoly

based on ownership of a manufacturing method

government monopoly

owned and operated by the government

market failure

whenever a flaw in the market system prevents an efficient allocation of resources

reasons for market failure

not enough competition, not enough info, resources that cant move, too few public goods, spillover effects

spillover effects (externailities)

failures that either benefit or harm a 3rd party not involved in the causing it