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22 Cards in this Set
- Front
- Back
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___= a market structure characterized by many firms selling differentiated products in an industry in which there is free entry/exit
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monopolistic competition
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___= an industry characterized by few firms selling the same product with limited entry of other firms
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oligopoly
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___= industry where there is many firms, free entry
-1 product |
competitive/competition
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___= industry where there is 1 firm, no entry and 1 product
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monopoly
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__= the effort by firms to produce goods that are slightly different from other types of goods
-like the fashion industry -leads to great variety in the products |
product differentiation
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___= goods with no product differentiation; they are always the same bc of what they are
Ex; aluminum, gold bullion |
homogeneous products
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___= trade btw countries in goods from the same or similar industries
Ex; beer from another country being sold in US- provides consumers with variety |
intraindustry trade
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___= trade btw countires in in different industries/ goods from different countries
Ex; trading bananas from a tropical country, for wheat in another bc of climate etc |
interindustry trade
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Products differentiated by...
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location, time, convenience
physical characteristics |
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__= costs of production that are higher that the minimum ATC
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excess costs
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__= situation in which a firm produces below the level that gives the minimum ATC
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excess capacity
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___= firm behavior that takes into account the market power and reactions of other firms in the industry
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strategic behavior
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___= branch of applied math with many uses in economics, including the analysis of the interaction of firms that take each others actions into account
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game theory
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__= game in which individual incentives lead to a nonoptimal/noncooperative outcome. if players can credibly commit to operate, then they achieve the best/cooperative outcome
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prisoners dilemma
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__= table containing strategies and payoffs for 2 players in a game
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payoff matrix
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__= equilibrium in a game where the players agree to cooperate
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cooperative outcome
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___= equilibrium in a game where the players cannot agree to cooperate and instead follow their own incentives
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noncooperative outcome
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__= a set of strategies from which no player would like to deviate from strategy so stays constant
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nash equlibrium
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___= open cooperation of firms to make mutually beneficial pricing or production decisions
-illegal but still happens |
explicit collusion
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__= grp of producers in the same industry who coordinate pricing and production decisions
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cartel
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__= implicit or unstated cooperation btw firms to take mutually beneficial pricing production decisions
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tacit collusion
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___= the price setting firm in a collusive industry in which other firms follow the leader
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price leader
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