Econ Test 7/8 Flashcards
perfect competition
ideal model of a market economy
perfect competition
ideal model of a market economy
market structure
economic system of competition among businesses in the same industry
standard product
one that consumers see as identical regardless of producer
price taker
a business that cannot set the prices for its products. Instead, it accepts the market prices set by the interaction of supply and demand
imperfect competition
Market structure lacking one of the conditions needed for perfect competition
monopoly
a market structure in which only one seller sells a product for which there are no close substitutes
Cartel
a formal organization of sellers or producers that agree to act together to set prices and limit output
price maker
a firm that does not have to consider competitors when setting the prices of its products
barrier to entry
makes it hard to enter a market
natural monopoly
market situation in which the costs of production are lowest when only one firm provides output
government monopoly
a monopoly that exists because the government either owns and runs it, or authorizes its producers
technological monopoly
a monopoly that exists because the firm controls a manufacturing method, or a type of technology
geographic technology
a monopoly that exists because there are no other producers or sellers within a certain region
economies of scale
an economic situation in which the average cost of production falls as the producer grows larger
patent
legal registration of an invention or a process that gives the inventor exclusive property rights
monopolistic competition
many sellers offer similar, but not standardized products
product differentiation
the attempt to distinguish a product from similar products
nonprice competition
using factors other than low price - such as style, advertising, or giveaways to try to convince customers to buy a product
focus group
moderated discussion with small groups of consumers, to learn the demographics of a service
Oligopoly
market structure in which only a few sellers offer a similar product.
Market Share
percent of total sales in a market
start-up costs
expenses that a new business must pay to enter a market and begin selling to consumers
regulation
controlling business behavior through a set of rules or laws
antitrust legislation
laws that define monopolies and give the power to control and break them
trust
group of firms combined for the purpose of reducing competition in an industry
merger
one company combines with or purchases another to form a single firm
price fixing
when businesses work together to set the prices of competing products
market allocation
when competing business negotiate to divide up a market
predatory principles
setting prices below cost so that smaller producers can’t afford to participate in a market
cease and desist order
ruling that requires a firm to stop an unfair business practice
public disclosure
requires businesses to reveal product information to customers
Deregulation
involves actions taken to reduce or to remove government oversight and control of business
business organization
an enterprise that produces goods or provides services
sole proprietorship
a business owned and managed by a single person
limited life
a situation in which a business ceases to exist if the owner dies, retires, or leaves
unlimited liability
a situation in which a business owner is responsible for all losses, debts, and other claims against the business
partnership
a business co-owned by two or more people
general partnership
a partnership in which partners share responsibility for managing the business and each one is liable for all business debts and losses
limited partnership
one partner is not involved in the day-to-day running of business and is liable only for the funds he or she has invested
limited liability partnership
all partners are limited partners and not responsible for the debts and other liabilities of other partners
market structure
economic system of competition among businesses in the same industry
standard product
one that consumers see as identical regardless of producer
price taker
a business that cannot set the prices for its products. Instead, it accepts the market prices set by the interaction of supply and demand
imperfect competition
Market structure lacking one of the conditions needed for perfect competition
Cartel
a formal organization of sellers or producers that agree to act together to set prices and limit output
price maker
a firm that does not have to consider competitors when setting the prices of its products
barrier to entry
makes it hard to enter a market
natural monopoly
market situation in which the costs of production are lowest when only one firm provides output
government monopoly
a monopoly that exists because the government either owns and runs it, or authorizes its producers
technological monopoly
a monopoly that exists because the firm controls a manufacturing method, or a type of technology
geographic technology
a monopoly that exists because there are no other producers or sellers within a certain region
economies of scale
an economic situation in which the average cost of production falls as the producer grows larger
patent
legal registration of an invention or a process that gives the inventor exclusive property rights
monopolistic competition
many sellers offer similar, but not standardized products
product differentiation
the attempt to distinguish a product from similar products
nonprice competition
using factors other than low price - such as style, advertising, or giveaways to try to convince customers to buy a product
focus group
moderated discussion with small groups of consumers, to learn the demographics of a service
Oligopoly
market structure in which only a few sellers offer a similar product.
Market Share
percent of total sales in a market
start-up costs
expenses that a new business must pay to enter a market and begin selling to consumers
regulation
controlling business behavior through a set of rules or laws
antitrust legislation
laws that define monopolies and give the power to control and break them
trust
group of firms combined for the purpose of reducing competition in an industry
merger
one company combines with or purchases another to form a single firm
price fixing
when businesses work together to set the prices of competing products
market allocation
when competing business negotiate to divide up a market
predatory principles
setting prices below cost so that smaller producers can’t afford to participate in a market
cease and desist order
ruling that requires a firm to stop an unfair business practice
public disclosure
requires businesses to reveal product information to customers
Deregulation
involves actions taken to reduce or to remove government oversight and control of business
business organization
an enterprise that produces goods or provides services
sole proprietorship
a business owned and managed by a single person
limited life
a situation in which a business ceases to exist if the owner dies, retires, or leaves
unlimited liability
a situation in which a business owner is responsible for all losses, debts, and other claims against the business
partnership
a business co-owned by two or more people
general partnership
a partnership in which partners share responsibility for managing the business and each one is liable for all business debts and losses
limited partnership
one partner is not involved in the day-to-day running of business and is liable only for the funds he or she has invested
limited liability partnership
all partners are limited partners and not responsible for the debts and other liabilities of other partners
corporation
a business owned by individuals, called shareholders or stockholders
stock
shares of ownership in the corporation
dividend
part of the profit that the company pays out to stockholders
public company
a corporation that issues stock that can be freely bought and sold.
private company
one that retains control over who can buy or sell stock
bond
a contract a corporation issues that promises to repay borrowed money, plus interest
horizontal merger
describes the joining of companies that offer the same or similar products or services
vertical merger
describes the combining of companies involved in different steps of production
conglomerate
results from a merger of companies that produce unrelated goods or services
franchise
a business made up of semi-independent businesses that all offer the same products or services
cooperative
a type of business operated for the shared benefit of the owners, who are also its customers
nonprofit organization
an institution that acts like a business organization, but usually benefits society
San Mateo vs. Southern California and 14th amendment
Said businesses should be treated as people
