Chapter 7Econ Vocab

  1. Perfect Competition
    Market structure in which a large number of firms all produce the same product.
  2. Commodity
    Product that is the same no matter who produces it, such as petroleum, notebook paper, or milk.
  3. Barrier to Entry
    Any factor that makes it difficult for for a new firm to enter a market.
  4. Imperfect Competition
    A market structure that does not meet the conditions of perfect competition.
  5. Start-up Costs
    Expenses a firm must pay before it can begin to produce and sell goods.
  6. Monopoly
    Market dominated by a single seller.
  7. Economies of Scale
    Factors that cause a producer's average cost per unit to fall as output rises.
  8. Natural Monopoly
    Market that runs most efficiently when one large firm supplies all of the output.
  9. Government Monopoly
    Monopoly created by the government.
  10. Patent
    Licence that gives the inventor of a new product the exclusive right to sell it for a certain period of time.
  11. Franchise
    The right to sell a good or service within an exclusive market.
  12. License
    Government issued right to operate a business.
  13. Price Discrimination
    Division of customers into groups based on how much they will pay for a good.
  14. Market Power
    Ability of a company to change prices and output like a monopolist.
  15. Monopolistic Competition
    Market structure in which many companies sell product that are similar but not identical.
  16. Differentiation
    Making a product different from other similar products.
  17. Nonprice Competition
    Way to attract customers through style, service, or location, but not a lower price.
  18. Oligopoly
    Market structure in which a few large firms dominate a market.
  19. Price War
    Series of competitive price cuts that lowers the market price below the cost of production.
  20. Collusion
    Agreement among firms to divide the market, set prices, or limit production.
  21. Price Fixing
    Agreement among firms to charge one price for the same good.
  22. Cartel
    Formal organization of producers that agree to coordinate prices and production.
  23. Predatory Pricing
    Selling a product below cost to drive competitors out of the market.
  24. Antitrust Laws
    Laws that encourage competition in the marketplace.
  25. Trust
    like a cartel, an illegal grouping of companies that discourages competition.
  26. Merger
    Combination of two or more companies into a single firm.
  27. Deregulation
    Removal of some government controls over a market.
Card Set
Chapter 7Econ Vocab
Words and defs for Econ Vocab Quiz.