Economics: Market Structures/Failures Flashcards
Perfect Competition
A market in which a large number of firms all produce the same product.
Monopoly
Market dominated by a single seller who sells a unique product.
Monopolistic Competition
Many companies sell products that are similar but not identical.
Oligopoly
A few large firms dominate the market.
Externality
A side effect of production that has consequences for people other than the producer or consumer.
Technology Spillover
When technological knowledge spreads from one company to another, thereby promoting further innovations.
Public Goods
Goods and services that are not provided by the market system because of the difficulty of getting people who use them to pay for their use. (fire and police services, national defense, and public parks)
Private Goods
Goods that are sold in markets. (hats, cars, etc.)
Excludable Goods
Anyone who does not pay for the good can be excluded from using it
Non Excludable Goods
A good or service whose use cannot be denied to anyone
Rival in Consumption
A good that cannot be consumed by more than one person at the same time. (private goods)
Four Main Characteristics of Market Structure
- Number of producers
- Similarity of products
- Ease of entry
- Control of price
Examples of each market structure
Examples of positive externalities
Examples of negative externalities
Which market structure gives the most control over the market.
Which market structure gives the least control over the market.
