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9 Cards in this Set
- Front
- Back
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__= one firm in an industry selling a product for which there are no close substitues
(ex; cable, water companies) - model assumes that will choose a level of output that maximizes profits |
monopoly
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__= anything that prevents firms from entering a market
-other firms may not be free to enter -copyrights/patents |
barriers to entry
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__= the firms power to set its price without losing its entire share of the market
-competitor does not have this -called a ____, not a price taker(price taker is seen in competetive firm)- has power to set the price rather than the price set by the market |
market power
price maker |
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__= total revenue divided by quantity
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average revenue
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__= the reduction in consumer plus producer surplus due to lower level of production by the monopolist
-harm a monopoly causes the economy |
deadweight loss
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____= the difference btw price and MC divided by the price
-this index is an indicator or market power, where an index of 0 indicates no market power and a higher price to cost margin indicates greater market power |
price-cost margin
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__= a single firm in an industry in which ATC is declining over the entire range of production and the minimum efficient scale is larger that the size of the marker
-regulated by gvt |
natural monopoly
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__= market in which the threat of competition is enough to encourage firms to act like competitors
-threat of competition can lead to monopolists to act like competitors |
contestable market
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___= a situation in which different grps of consumers are charged different priced for the same good
-Ex; senior citizen discounts, movie theatre discounts for students, -sometimes higher prices are charged to consumers who buy less of an item |
price discrimination
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