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Monopoly
| Term | Definition |
|---|---|
| Barriers to entry | Obstacles that stop new firms entering a market |
| X-inefficient | Sometime called organisational slack Not reducing costs to the lowest level – the gap between the actual and lowest possible cost |
| Patent laws | A grant of temporary monopoly rights over a new product |
| Copyright | Ownership of rights e.g. to a book, giving redress at law for copying by a third party |
| Nationalised | Taking a firm/industry into public ownership – owned by the state |
| Incumbant | Existing firm(s) in the industry |
| Limit pricing | Setting a price so low that other firms will not enter the industry |
| Sunk costs | Irretrievable costs that occur when a firm exits an industry |
| Legal monopoly | A firm with 25% or more of the market share |
| Product differentiation | A way of distinguishing a product from that of competitors |
| Marginal cost pricing | Setting the price at the level of marginal cost |
| Average cost pricing | Setting the price at the level of average cost |
| Dead-weight / welfare loss | Reduction in consumer and producer surplus when output is restricted to less than the optimum level |
| Price discrimination | Where an identical good/service is sold to different customers at different prices for reasons not associated with costs |
| 1st degree | When the discriminating can charge a separate price to each individual consumer |
| 2nd degree | When the discriminating can charge a separate price to different groups of consumers |
| 3rd degree | When the discriminating can charge a different price in each country |
Created by:
zuigy
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