competition/monopoly

Question 1

imperfect competition

Answer 1

an industry in which firms have some control over price

Question 2

market power

Answer 2

the ability of a company to raise prices without loosing all customers

Question 3

pure monopoly

Answer 3

an industry with a single firm that produces a product for which there are no close substitutes and in which significant barriers to entry prevent other firms from entering the industry to compete for profits.

Question 4

natural monopoly

Answer 4

when economies of scale are so big that it makes sense for there to be only one producer

Question 5

rent-seeking behavior

Answer 5

actions taken by households or firms to preserve positive profits

Question 6

public choice theory

Answer 6

economic theory that says that government officials will set economic policy in their own self interest

Question 7

oligopoly

Answer 7

a form of market in which a few dominant firms compete. products may be differentiated

Question 8

concentration ratio

Answer 8

the share of the industry output accounted for by the top firms

Question 9

cartel

Answer 9

a group of firms that gets together and makes joint price and output decisions to maximize joint profits

Question 10

dominant strategy

Answer 10

in game theory, a strategy that is best regardless what the opposition does