Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Econ 10 11 12 terms
Microeconomics chapters 10, 11, and 12
| Question | Answer |
|---|---|
| monopoly | a market in which a single firm sells a product that does not have any close substitutes |
| market power | the ability of a firm to affect the price of its product |
| barrier to entry | something that prevents firms from entering a profitable market |
| patent | the exclusive right to sell a new good for some period of time |
| network externalities | the value of a product to a consumer increases with the number of other consumers who use it |
| natural monopoly | a market in which the economies of scale in production are so large that only a single large firm can earn a profit |
| deadweight loss from monopoly | a measure of the inefficiency from monopoly; equal to the decrease in the market surplus |
| rent seeking | the process of using public policy to gain economic profit |
| price discrimination | the practice of selling a good at different prices to different consumers |
| monopolistic competition | a market served by many firms that sell slightly different products |
| product differentiation | the process used by firms to distinguish their products from the products of competing firms |
| oligopoly | a market served by a few firms |
| game theory | the study of decision making in strategic situations |
| concentration ratio | the percentage of the market output produced by the largest firms |
| duopoly | a market with two firms |
| cartel | a group of firms that act in unison, coordinating their price and quantity decisions |
| price-fixing | an arrangement in which firms conspire to fix prices |
| game tree | a graphical representation of the consequences of different actions in a strategic setting |
| dominant strategy | an action that is the best choice for a player, no matter what the other player does |
| duopolists' dilemma | a situation in which both firms in a market would be better off if both chose the high price, but each chooses the low price |
| Nash equilibrium | an outcome of a game in which each player is doing the best he or she can, given the action of the other players |
| low-price guarantee | a promise to match a lower price of a competitor |
| grim-trigger strategy | a strategy where a firm responds to underpricing by choosing a price so low that each firm makes zero economic profit |
| tit-for-tat | a strategy where one firm chooses whatever price the other firm chose in the preceding period |
| price leadership | a system under which one firm in an oligopoly takes the lead in setting prices |
| kinked demand curve model | a model in which firms in an oligopoly match price cuts by other firms, but do not match price hikes |
| payoff matrix | a matrix or table that shows, for each possible outcome of a game, the consequences for each player |
| limit pricing | the strategy of reducing the price to deter entry |
| contestable market | a market with low entry and exit costs |
| marginal principle | increase the level of an activity as long as its marginal benefit exceeds its marginal cost. Choose the level at which the marginal benefit equals the marginal cost |
| profit formula | profit= total revenue-total cost |
| A firm has an opportunity for price discrimination if three conditions are met: | 1. Market power. 2. Different consumer groups. 3. Resale is not possible. |
Created by:
june6honey
Popular Finance sets