Imperfect competition

A market structure that does not meet the conditions of perfect competition.

The expenses that a new business must pay before the first product reaches the costomer.

Forms when barriers prevent firms from entering a market that has a single supplier.

If a firm's start-up costs are high, and it's average costs fall for each additional unit it produces.

Is a market that runs most efficently when one large firm provides all of the output.

Is a monopoly created by the government.

Gives a company exclusive rights to sell a new good or service for a specific period of time.

Is a contract issued by a local authority that gives a single firm the right to sell its goods within an exclusive market.

Granting firms the right to operate a buisness.

The monopolist may be able to divide consumers into two or more groups and charge a different price to each group.

Is the ability to control prices and total market output.

Monopolistic competition

Many companies compete in an open market to sell products that are similar but not identical.

Making a product different from other similar products.

Non price competition

Or competition through ways other than lower prices.

Describes a market dominated by a few large, profitable firms.

When competitors cut their prices very low to win buisness.

Refers to an agreement among members of an oligopoly to set prices and production levels.

An agreement among firms to sell at the same or very similar prices.

Is an agreement by a formal organization of producers to coordinate prices and production.

Selling a product below cost to drive competitors out of the market.

Laws that encourage competition in the market place.

Like a cartel, an illegal grouping of companies that discourages competition.

The removal of some government controls over a market.

Combination of 2 or more companies into a single firm.

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Econ Chapter 7

Question	Answer
Perfect competition	The simplest market structure.
Commodity	A product that is considered the same regardless of who makes or sells it.
Barriers to entry	Factors that make it difficult for new firms to enter a market.
Imperfect competition	A market structure that does not meet the conditions of perfect competition.
Start-up costs	The expenses that a new business must pay before the first product reaches the costomer.
Monopoly	Forms when barriers prevent firms from entering a market that has a single supplier.
Economies of scale	If a firm's start-up costs are high, and it's average costs fall for each additional unit it produces.
Natural monopoly	Is a market that runs most efficently when one large firm provides all of the output.
Government monopoly	Is a monopoly created by the government.
Patent	Gives a company exclusive rights to sell a new good or service for a specific period of time.
Franchise	Is a contract issued by a local authority that gives a single firm the right to sell its goods within an exclusive market.
License	Granting firms the right to operate a buisness.
Price discrimination	The monopolist may be able to divide consumers into two or more groups and charge a different price to each group.
Market power	Is the ability to control prices and total market output.
Monopolistic competition	Many companies compete in an open market to sell products that are similar but not identical.
Differentiation	Making a product different from other similar products.
Non price competition	Or competition through ways other than lower prices.
Oligopoly	Describes a market dominated by a few large, profitable firms.
Price war	When competitors cut their prices very low to win buisness.
Collision	Refers to an agreement among members of an oligopoly to set prices and production levels.
Price fixing	An agreement among firms to sell at the same or very similar prices.
Cartel	Is an agreement by a formal organization of producers to coordinate prices and production.
Predatory pricing	Selling a product below cost to drive competitors out of the market.
Antitrust laws	Laws that encourage competition in the market place.
Trust	Like a cartel, an illegal grouping of companies that discourages competition.
Deregulation	The removal of some government controls over a market.
Merger	Combination of 2 or more companies into a single firm.

Created by: Skylar Wise

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