Market Structures Test Flashcards Preview

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Flashcards in Market Structures Test Deck (21):
1

Define Barrier to Entry

-obstacles that limit the ability of new companies to enter the market
-allows existing firms to earn profits in the long run

2

Define Cartel

a pure monopoly and is very rare

3

Define Deregulation

-Reduction of government oversight and control of business
-Results in lower prices because there is more competition
-May lead to fewer protection for consumers

4

Define Market Structure

Economic model that allows economists to examine competition among businesses in the same industry

5

Define Monopolistic Competition

-many sellers with similar goods and services
-aka polyopolies
-most markets are this

6

Define Monopoly

-One seller
-Restricted and regulated market
-Control of prices

7

Define Oligopoly

-Few sellers/similar product
-Large firms
-Consumer choices are limited

8

Define Predatory Pricing

the pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market.

9

Define Price Fixing

conspiring among or between businesses to set the price of competing products

10

Define Product Differentiation

the attempt to distinguish a product from similar products

11

Define Public Disclosure

a policy requiring businesses to reveal product information to buyers

12

Define Regulation

-Controlling behavior through rules and laws
-Promotes competition by prohibiting unfair business practicing

13

Define Standardized Product

a product that consumers consider identical in all essential features to other products in the same market

14

What are the characteristics of imperfect competition?

-occurs in markets with few sellers or products that are not standardized
-Producers are hindered by barriers to entry in market structure

15

What are the characteristics of perfect competition?

-ideal model of a market economy
-never can be perfect
-Most competitive market structure
-Tons of buyers and sellers
-Standardized products
-freedom to enter and exit
-Independent buyers and sellers
-Well informed buyers and sellers

16

How are the monopolists able to control prices?

They can raise prices as they please because they have no competition

17

What are examples of standardized products?

paper towels, eggs, milk, anything that is the same no matter where you get it

18

Define Natural Monopoly and provide an example

a type of monopoly that operates most efficiently with only one producer; water companies

19

Define Government Monopoly and provide an example

a market in which the government is the only legally permitted producer or service provider; post office

20

Define Technological Monopoly and provide an example

special rights given to those who invent a new product to create some type of work; idk examples

21

Define geographic Monopoly and provide an example

A condition that exists in a local area or region wherein one company is the sole provider of a good or service; general stores in small towns