Chapter 7 Vocab Flashcards
A market structure in which a large number of firms all produce the same product
Perfect competition
A product that is the same no matter who produces it, such as petroleum, notebook paper, or milk
Commodity
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
Factors that cause a producers average cost per unit to fall as output rises
Economies of scale
A market that runs most efficiently when one large firm supplies all of the output
Natural monopoly
A monopoly created by the government
Government monopoly
A license that gives the inventor of 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 market structure in which many companies sell products that are similar but not identical
Monopolistic competition
