Chapter 24 Definitions

Question 1

The single supplier of a good or service for which there is no close substitute. A __________ therefore constitutes its entire industry

Answer 1

Monopolist

Question 2

A monopoly that arises from the peculiar production characteristics in an industry. It usually arises when there are large economies of scale relative to the industry’s demand such that one firm can produce at a lower average cost than can be achieved by multiple firms

Answer 2

Natural Monopoly

Question 3

Taxes on imported goods

Answer 3

Tariffs

Question 4

A firm that must determine the price-output combination that maximizes profit because it faces a downward sloping demand curve

Answer 4

Price searcher

Question 5

Selling a given product at more than one price, with the price difference being unrelated to differences in marginal cost

Answer 5

Price Discrimination

Question 6

Establishing different prices for similar products to reflect differences in marginal cost in providing those commodities to different groups of buyers

Answer 6

Price Differentiation