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Wills econ
Term Sheet 4
| Question | Answer |
|---|---|
| Pure Competition | market that has a broad range of competitors who are selling the same products. |
| Barriers of Entry | the economic term describing the existence of high start-up costs or other obstacles that prevent new competitors from easily entering an industry or area of business. |
| Imperfect Competition | the situation prevailing in a market in which elements of monopoly allow individual producers or consumers to exercise some control over market prices. |
| Monopoly | the exclusive possession or control of the supply of or trade in a commodity or service. |
| Economics of Scale | a proportionate saving in costs gained by an increased level of production. |
| Natural Monopoly | monopoly in an industry in which high infrastructural costs and other barriers to entry relative to the size of the market give the largest supplier in an industry, an overwhelming advantage over potential competitors. |
| Franchise | an authorization granted by a government or company to an individual or group enabling them to carry out specified commercial activities, e.g., providing a broadcasting service or acting as an agent for a company's products. |
| License | A business arrangement in which one company gives another company permission to manufacture its product for a specified payment. |
| Price Discriminations | a selling strategy that charges customers different prices for the same product or service based on what the seller thinks they can get the customer to agree to. |
| Market Power | the ability of a firm (or group of firms) to raise and maintain price above the level that would prevail under competition is referred to as market or monopoly power. |
| Monopolistic Competition | a type of imperfect competition such that many producers sell products that are differentiated from one another and hence are not perfect substitutes. |
| Differentiation | the process of distinguishing a product or service from others, to make it more attractive to a particular target market. |
| Non-Price Competition | a marketing strategy "in which one firm tries to distinguish its product or service from competing products on the basis of attributes like design and workmanship". |
| Oligopoly | a market structure with a small number of firms, none of which can keep the others from having significant influence. |
| Price War | a competitive exchange among rival companies who lower the price points on their products, in a strategic attempt to undercut one another and capture greater market share. |
| Collision | a non-competitive, secret, and sometimes illegal agreement between rivals which attempts to disrupt the market's equilibrium. |
| Price Fixing | an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand. |
| Cartels | a grouping of producers that work together to protect their interests. |
| Predatory Pricing | Predatory pricing (also undercutting) is a pricing strategy where a product or service is set at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. |
| Antitrust Laws | collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote competition for the benefit of consumers. |
| Trust | combination of firms designed to restrict competition or control prices in a particular industry |
| Merger | agreement that unites two existing companies into one new company. |
| Deregulation | the reduction or elimination of government oversight and control of business |
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