Chapter 7 Flashcards Preview

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Flashcards in Chapter 7 Deck (23):
1

market structure

economic model of competition within an industry

2

perfect competition

ideal model of a market economy

3

imperfect competition

market structure hat lack one more of the conditions

4

monopoly

market structure with one seller, no substitutes for the product

5

cartel

organizations of sellers that agree to set prices and limit output

6

price maker

business without competitors and can set price

7

barrier to entry

obstacle to entering market (i.e. government regulations, size, resources, technology)

8

natural monopoly

cost of production lowest with only one producer (i.e. water company)

9

government monopoly

government owns and runs or permits only one producer (i.e. the postal service)

10

technological monopoly

one firm owns invention, technology and method (i.e. polaroid)

11

geographic monopoly

no other sellers within a region (i.e. professional sports)

12

monopolistic competition

many sellers offer similar products

13

oligopoly

market structure with only a dew sellers offering similar product

14

product differentiation

sellers try to distinguish their products from similar ones

15

nonprice competition

use factors other than price to attract customers

16

antitrust legislation

defines monopolies and allow government to control or break them up

17

trust

group of firms combined to reduce competition

18

merger

joining of firms or purchase of one firm by another

19

price fixing

competing businesses collaborate to set prices

20

predatory pricing

set prices below cost to drive out small producers

21

cease and desist order

requires firm to stop unfair business practice

22

public disclosure

requires businesses to reveal product information

23

deregulation

reduces or removes government oversight and control