Ch-7 Flashcards
Commodity
A product that is the same no matter who produces it, such as petroleum, notebook paper, or milk
Perfect Competition
A market structure in which a large number of firms all produce the same product
Barrier to Entry
Any factor that makes it difficult for a new firm to enter a market
Imperfect Competition
A market structure that does not meet the conditions of perfect competition
Start-Up Costs
The expenses a firm must pay before it can begin to produce and sell goods
Monopoly
A market dominated by a single seller
Patent
A license that gives the inventor a new product the exclusive right to sell it for a certain period of time
Franchise
The right to sell a good or service within an exclusive market
License
A government-issued right to operate a business
Price Discrimination
Division of customers into groups based on how much they will pay for a good
Market Power
The ability of a company to change prices and output like a monopolist
Price War
A series of competitive price cuts that lowers the market price below the cost of production
Collusion
An agreement among firms to divide the market, set prices, or limit production
Price Fixing
An agreement among firms to charge one price for the same good
Cartel
A formal organization of producers that agree to coordinate prices and production
