Chapter 9 Terms

Question 1

A group of businesses that share common concerns

Answer 1

Industry

Question 2

____________ _________ are visibly different from one firm to another

Answer 2

Differentiated products

Question 3

Products that are exactly alike regardless of which firm produced them.

Answer 3

Undifferentiated products

Question 4

Any significant obstacle that prevents or hinders a new firm from entering an industry and competing on an equal basis with other firms.

Answer 4

Barrier to entry

Question 5

_______ ________ to _______ occurs when firms already in the industry own all the vital natural resources that a new firm would need to enter the market

Answer 5

Natural barriers to entry

Question 6

Government regulations, such as licensing requirements or patents, which are an exclusive right to manufacture a new invention.

Answer 6

Artificial barriers to entry

Question 7

When there are many producers selling an identical product, no single firm controls the price, and businesses find it relatively easy to enter and exit the market

Answer 7

Perfect competition

Question 8

Many producers of slightly different goods, and each firm has some control over price and can enter and exit the market with relative ease

Answer 8

Imperfect competition

Question 9

The word ____ literally means “Selling by a few”

Answer 9

Oligopoly

Question 10

An industry in which the top 4 firms account for 75 percent of the market sales

Answer 10

Tight oligopoly

Question 11

Top 4 firms account for 50-70% of industry’s total sales

Answer 11

Loose oligopoly

Question 12

An oligopoly composed of exactly 2 firms

Answer 12

Duopoly

Question 13

An agreement among a small number of producers to reduce output and increase price

Answer 13

Collusion

Question 14

When producers form collusive agreements in countries in which they are legal or when the agreement spans across national borders.

Answer 14

Cartel

Question 15

A ______ is a form of market organization in which there is only one supplier in the industry

Answer 15

Monopoly

Question 16

When a firm controls 100% of a resource that is essential to an industry

Answer 16

Natural monopoly

Question 17

When the government allows a firm exclusive right to provide a good or service.

Answer 17

Legal monopoly

Question 18

One of big business’s favorite ways to limit competition with out a monopoly. The largest form would convince other forms to put their stock in a trust account. The manager would look after the affairs of the larger group and distribute the profits.

Answer 18

Trust

Question 19

Firms were skirting the sheens act by placing one or more directors on the boards of competing firms

Answer 19

Interlocking directorates

Question 20

Big companies requiring small companies desiring to buy from them ha dot purchase their full line of products.

Answer 20

Tying contracts

Question 21

Corporations could not take over other firms by purchasing their common stock if the effect was to limit competition significantly

Answer 21

Anticompetitive takeovers

Question 22

The Clayton act made it unlawful for firms to sell the same goods to different buyers at different prices

Answer 22

Price discrimination

Question 23

The word ___ refers to the arrangements that people have developed for trading with one another, and competition is the struggle each firm experiences as it seeks to survive and then thrive within those arrangements

Answer 23

Market