Ch. 7 vocab Flashcards
(17 cards)
laws that encourage competition in the marketplace
antitrust laws
formal organization of producers that agree to coordinate prices and production
cartel
agreement among firms to divide the market, set prices, or limit production
collusion
a product that is the same regardless of who produces it
commodity
the removal of some government controls over a market
deregulation
making a product different from other similar products
differentiation
factors that cause a producer’s average cost per unit to fall as output rises
economies of scale
the right to sell a good or service within an exclusive market
franchise
government issued right to operate a business
license
the ability of a company to charge prices and output like a monopolist
market power
combination of two or more companies into a single firm
merger
a way to attract customers through style, service, or location, but not a lower price
nonprice competition
selling a product below cost to drive competitors out of the market
predatory pricing
division of customers into groups based on how much they will pay for a good
price discrimination
agreement among firms to charge one price for the same good
price fixing
a series of competitive price cuts that lowers the market price below the cost of production
price war
an illegal grouping of companies that discourages competition
trust
