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