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Flashcards in Chapter 11 Deck (14):
1

Monopoly

Market structure in which one firm produces all of the output in a market.

2

Monopolistic Competition

Involves many firms competing against each other in the sales of somewhat distinctive products. Examples include clothing stores that sell different styles of clothing and restaurants that offer differing cuisines. Monopolistic competition even includes distinct producers who sell items—such as gold balls or beer—that may be somewhat similar but differ in public perception due to branding and advertising.

3

Oligopoly

Market structure in which a small number of firms, perhaps just two or three, sell all of the output.

4

patent

Gives the inventor the exclusive legal right to make, use, or sell the invention for a limited time. In the United States, exclusive patent rights last for 20 years.

5

trademark

Income left in the economy after paying for all consumption spending by households and government spending. Also known as just saving.

6

copyright

Offers legal protection of original works of authorship for the life of the author plus 70 years.

7

natural monopolies

price floor

8

Productive efficiency

Occurs when given the available factors of production and technology, it is impossible to produce more of one good without decreasing the quantity that is
produced of another good.

9

price setters

Term that describes monopolists. That is, a monopolist does not simply take the market price as given but sets its own price within the confines of consumers’ willingness to pay, shown by the demand curve. Not only does a monopoly have the market power to set its own price, in some cases it can also charge different prices for the same product.

10

price discrimination

A firm engages in price discrimination when it charges different prices to distinct customers based upon variances in willingness to pay.

11

perfect price discrimination

Occurs when the seller can identify the price that each buyer is willing to pay.

12

merger

Occurs when two formerly separate firms combine to become one single firm.

13

acquisition

Occurs when one firm purchases another.

14

Natural monopolies

price floor