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ECO Topic 4 Vocab
ECO Topic 4 Vocabulary PEARSON 2016
| Term | Definition |
|---|---|
| Pure Competition | A market in which a large number of firms all produce essentially the same product |
| Commodity | A product such as petroleum or milk that is considered the same no matter who produces or sells it |
| Barrier to Entry | Any factor that makes it difficult for a new firm to enter a market |
| Imperfect Competition | A market structure that fails to meet the conditions of perfect competition |
| Start-Up Costs | The expenses a new business must pay before it can begin to produce and sell goods |
| Monopoly | A market in which a single seller dominates |
| Economies of Scale | Factors that cause a producer's average cost per unit to fall as output rises |
| Natural Monopoly | A market that runs most efficiently when one large firm supplies all of the output |
| Government Monopoly | A monopoly created by the government |
| Patent | A license that gives the inventor of a new product the exclusive right to sell it for a specific period of time |
| Franchise | A contract that gives a single firm the right to sell its goods within an exclusive market |
| License | A government-issued right to operate a business |
| Price Discrimination | A division of consumers into groups based on how much they will pay for a good |
| Market Power | The ability of a company to control prices and total market output |
| Monopolistic Competition | A market structure in which many companies sell products that are similar but not identical |
| Differentiation | Making a product different from other, similar products |
| Non-Price Competition | A way to attract customers through style, service, or location, but not a lower price |
| Oligopoly | A market structure in which a few large firms dominate a market |
| Price War | A series of competitive price cuts that lowers that market price below the cost of production |
| Collusion | An illegal agreement among firms to charge one price for the same good |
| Price Fixing | An agreement among firms to charge one price for the same good |
| Cartel | A formal organization of producers that agree to coordinate prices and production |
| Predatory Pricing | Selling a product below cost for a short period of time to drive competitors out of the market |
| Antitrust Laws | Laws that encourage competition in the marketplace |
| Trust | An illegal grouping of companies that discourages competition, similar to a cartel |
| Merger | When two or more companies join to form a single firm |
| Deregulation | The removal of government controls over a market |
Created by:
cwarsing
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