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Economics - Topic 4
Economics - Topic 4 Vocabulary
| Term | Definition |
|---|---|
| pure competition | a market structure in which a large number of firms all produce the same product and no single seller controls supply or prices; also called perfect competition |
| commodity | a product, such as petroleum or milk, that is considered the same no matter who produces or sells it |
| barriers to entry | any factor that makes it difficult for a new firm to enter a market |
| 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 |
| natural monopoly | a market that runs most efficiently when one large firm provides all of the output |
| patent | a government license that gives the inventor of a new product the exclusive right to produce and sell it |
| license | a government-issued right to operate a business |
| price discrimination | the division of consumers into groups based on how much they will pay for a good |
| monopolistic competition | a market structure in which many companies sell products that are similar but not identical |
| non-price competition | a way to attract customers through style, service, or location, rather than a lower price |
| oligopoly | a market structure in which a few large firms dominate a market |
| collusion | an illegal agreement among firms to divide the market, set prices, or limit production |
| price fixing | an agreement among firms to charge one price for the same good |
| 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 |
| merger | when two or more companies join to form a single firm |
| deregulation | the removal of government controls over a market |
| surplus | when quantity supplied is more than quantity demanded |
| shortage | a situation in which consumers want more of a good or service than producers are willing to make available at a particular price |
Created by:
brittlloyd
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