Market Structures Flashcards
Barrier to entry?
Obstacles that limit the ability of new firms to enter a particular industry
Cartel
A group that works together to lower prices and limit supply
Deregulation?
Actions taken to reduce or remove government oversight an control of businesses
Market structure?
Economic model that allows economists to examine competition among businesses in the same industry
Monopolistic competition (polyopolies)?
Have many sellers that offer similar but not standardized products
Monopoly?
Occurs when there is only one seller of a product that has no close substitute
Oligopoly?
Few sellers offer similar products
Patent?
How a technological monopoly restricts the market, a device that blocks other businesses access to that technology
Predatory pricing?
Businesses set prices low below cost for a time to drive competition out of the market
Price fixing?
Businesses agree to set prices of competing products
Product differentiation?
Allows price differences
Public disclosure?
Policy that requires businesses to reveal product information
Regulation?
Controlling business behaviors through a set of rules or laws
Standardized product?
All products are essentially the same
Trust?
A group of firms combined in order to reduce competition in an industry
What are the characteristics of perfect competition?
The characteristics of perfect competition are; numerous buyers and sellers, standardized products, freedom to enter and exit the market, independent buyers and sellers, and well informed buyers and sellers
What are the characteristics of a monopoly?
The characteristics of a monopoly are; there is only one seller, it has a restricted and regulated market, and control of prices
What are the characteristics of monopolistic competition?
The characteristics of monopolistic competition are; many sellers an buyers, similar but differentiated products, limited control of prices, and freedom to enter and exit the market
How are monopolists able to control prices?
Monopolists are able to control prices by controlling supply
What are the examples of the barriers to entry?
The example of the barriers to entry are; legal barriers, control of vital resources, significant scale businesses are at cost disadvantages, and market advantages of existing firms
What are some examples of standardized products?
Agricultural products like corn or eggs
What are some examples of unfair business practices?
Predatory pricing, market allocation, price fixing
What are the ways in which the government attempts to protect the consumer?
The government protects consumers with: public disclosures and protection agencies
What is a natural monopoly? Give an example
Occurs when the costs of production are lowest with only one producer. Ex: the water company
What is a government monopoly? Give an example
Exists when the government wither owns and runs the business or authorizes the one producer. Ex: postal service
What is a technological monopoly? Give an example
Occurs when a firm controls a manufacturing method, invention, or type of technology. Ex: polaroid
What is a geographic monopoly? Give an example
Exists when there are no other producers of each. Ex: professional sports
