4 - concentrated markets: theory of monopoly Flashcards

1
Q

obstacles that stop new firms entering a market

A

barriers to entry

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2
Q

the gap between the actual and lowest possible cost (not reducing the costs to their lowest level)

A

x-inefficient

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3
Q

a grant of temporary monopoly rights over a new product

A

patent laws

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4
Q

ownership of rights, e.g a book, giving redress at law for copying a third party

A

copyright

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5
Q

taking a firm/industry into public ownership - ownership by the state

A

nationalised

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6
Q

setting a price so low that other firms will not enter the industry

A

limit pricing

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7
Q

irretrievable costs that occur when a firm exits an industry

A

sunk costs

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8
Q

a firm with 25% or more market share

A

legal monopoly

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9
Q

a way of distinguishing a product from that of competitors

A

product differentiation

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10
Q

setting the price at the level of marginal cost

A

marginal cost pricing

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11
Q

setting the price at the level of average cost

A

average cost pricing

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12
Q

reduction in consumer and producer surplus when output is restricted to less than the optimum level

A

dead-weight loss

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13
Q

where an identical good/service is sold to different customers at different prices for reasons not associated with costs

A

price discrimination

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14
Q

when the discriminating firm can charge a separate price to each individual customer

A

first degree price discrimination

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15
Q

when the discriminating firm can charge a separate price to different customer groups

A

second degree price discrimination

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16
Q

when the discriminating firm can charge a different price in each country

A

third degree price discrimination