Theme 3 Flashcards
1
Q
Allocative efficient
A
When resources are allocated to the best interests of society, where these is maximum social welfare and utility; P=MC
2
Q
Asymmetric information
A
Where one party has more information than the other, leading to market failure and causing problems for regulators
3
Q
Average cost/average total cost (AC/ATC)
A
The cost of production per unit
4
Q
Average revenue
A
The price each unit is sold for
5
Q
Bilateral monopoly
A
Where there is only one buyer and one seller in the market
6
Q
Cartels
A
A formal collusive agreement where firms enter into an agreement to mutually set prices
7
Q
Collusion
A
Occurs when firms agree to work together, for example by setting a price or fixing the quantity they produce
8
Q
Competition policy
A
Government action to increase compétions in markets
