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Unit 3-2
Unit 3-2 Market Structures (Chapter 7)
| Term | Definition |
|---|---|
| Perfect Competition | A markets structure where a large number of firms all produce an identical product |
| Commodity | A good that is the same no matter who produces it (i.e. milk, petroleum, produce) |
| Barrier to Entry | any factor that makes it difficult for a new firm to enter the market |
| Start-up Costs | the expenses a firm must pay before it can begin to produce and sell goods |
| Monopoly | A market dominated by a single seller |
| Natural Monopoly | A market that runs most efficiently when one large firm supplies all of the output (Like Georgia Power or MWA) |
| Government Monopoly | Any monopoly created by the government |
| Patent | Gives the inventor of a new product the exclusive rights to sell it. Creates a technological monopoly. |
| Franchise | The right to sell a good or service within an exclusive market |
| License | A government issued right to operate a business |
| Price Discrimination | Division of customers into groups based on how much they will pay for a good. (i.e. student, senior, and regular pricing at movie theaters) |
| Monopolistic Competition | Many sellers competing to sell a product that is similar, but not identical. |
| Nonprice Compeition | a way to attract customers through style, service, or location. |
| Oligopoly | Market structure in which a few large firms dominate the market |
| Price War | a series of competitive price cuts that lowers the market price below production costs. |
| Cartel | a formal organization of producers that agree to coordinate prices and production. |
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croper1
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