price elasticity of demand

a measure of the responsiveness of buyers to a change in the price of a product or resource.

price elasticity of supply

a measure of the responsiveness of producers to a change in the price of a product or resource

income elasticity of demand

measures the responsiveness of consumer purchases and income changes

cross elasticity of demand

the sensitivity of consumer purchases of one product to a chang in price of other product.

a good or service to which excludability could apply but that has such a large spillover benefit that government sponsors its production to prevent an under allocation of resources

a very large number of firms producing a standardized product. New firms can enter or exit the industry very easily. Firms must accept the market price

monopolistic competition

a market structure where many firms sell similar but differentiated products, giving them some pricing power while still facing competition. small market shares, no collusion, independent action

a few sellers of a standardized (steel) or differentiated (cars) product, so each firm is affected by its rivals’ decisions and must take those decisions into account in determining its own price and output. entry barriers, control over price, mergers

one firm is the sole seller of a product. entry of additional firms is blocked, one firm constitutes the entire industry. The monopoly firm produces a single unique product and has full control over that products price. nonprice competition

An industry in which economies of scale are so great that a single firm can produce the product at a lower average total cost than would be possible if more than one firm produced the product.

The selling of a product to different buyers at different prices when the price differences are not justified by differences in cost.

conditions of price discrimination

monopoly power, market segregation, no resale

examples of monopolistically competitive industries

jewelry, asphalt, wood pallets, commercial signs, leather goods, plastic pipes, textile bags and kitchen cabinets

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EC101-2

Term	Definition
price elasticity of demand	a measure of the responsiveness of buyers to a change in the price of a product or resource.
price elasticity of supply	a measure of the responsiveness of producers to a change in the price of a product or resource
income elasticity of demand	measures the responsiveness of consumer purchases and income changes
cross elasticity of demand	the sensitivity of consumer purchases of one product to a chang in price of other product.
Quasie-public goods	a good or service to which excludability could apply but that has such a large spillover benefit that government sponsors its production to prevent an under allocation of resources
pure competition	a very large number of firms producing a standardized product. New firms can enter or exit the industry very easily. Firms must accept the market price
monopolistic competition	a market structure where many firms sell similar but differentiated products, giving them some pricing power while still facing competition. small market shares, no collusion, independent action
oligopoly	a few sellers of a standardized (steel) or differentiated (cars) product, so each firm is affected by its rivals’ decisions and must take those decisions into account in determining its own price and output. entry barriers, control over price, mergers
pure monopoly	one firm is the sole seller of a product. entry of additional firms is blocked, one firm constitutes the entire industry. The monopoly firm produces a single unique product and has full control over that products price. nonprice competition
natural monopoly	An industry in which economies of scale are so great that a single firm can produce the product at a lower average total cost than would be possible if more than one firm produced the product.
price discrimination	The selling of a product to different buyers at different prices when the price differences are not justified by differences in cost.
conditions of price discrimination	monopoly power, market segregation, no resale
examples of monopolistically competitive industries	jewelry, asphalt, wood pallets, commercial signs, leather goods, plastic pipes, textile bags and kitchen cabinets

Created by: GradeAStudent

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