Econ Vocab 7 Flashcards
Market structure
an economic model that allows economists to examine competition among businesses in the same industry
Perfect Competition
the ideal model of a market economy
Standardized product
a product that consumers consider identical in all essential features to other products in the same market.
Price taker
a business that cannot set the prices for its products but, instead, accepts the market price set by the interactions of supply and demand
imperfect competition
market structures that lack 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 products that agree to act together to set prices and limit output
Price maker
a business that does not have to consider competitors when setting its prices.
barrier to entry
something that hinders a business from entering a market
Natural monopoly
a 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 the business or authorizes only one producer
technological monopoly
a monopoly that exists because the firm controls a manufacturing method, an invention, or a type of technology
geographic monopoly
a monopoly that exists because there are no other producers or sellers within a certain region
economies of scale
a situation in which the average cost of production falls as the producer grows larger
patent
a legal registration of an invention or a process that gives the inventor the exclusive property rights to that invention or process for a certain number of years
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, service, advertising, or giveaways- to try to convince customers to buy one product rather than another.
Focus group
a moderated discussion with small groups of consumers
Oligopoly
a market structure in which only a few sellers offer a similar product, is less competitive than monopolistic competition
market share
percent of total sales in a market
start-up costs
the expenses that a new business must pay to enter a market and begin selling to consumers
regulations
controlling business behavior through a set of rules or laws
antitrust legislation
laws that define monopolies and give government the power to control them and break them up
trust
a group of firms combined for the purpose of reducing competition in an industry
merger
when one company combines with or purchases another to form a single firm
Price fixing
which occurs when businesses work together to set the prices of competing products
market allocation
occurs when competing businesses negotiate to divide up a market
predatory pricing
setting prices below cost so that smaller producers cannot afford to participate in a market.
Cease and desist order
a ruling that requires a firm to stop an unfair business practice
Public disclosure
requires businesses to reveal product information to consumers
deregulation
reducing or removing government oversight and control of business
