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22 Cards in this Set
- Front
- Back
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__= gvt actions designed to promote competition among firms in the economy; also called competition policy or antimonopoly policy
-challenges/breaks up firms with significant power, preventing mergers, pprohibits price fixing |
antitrust policy
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__= a law passed in 1890 in the US to reduces anticompetitive behavior; section 1 makes price fixing illegal and section 2 makes attempts to monopolize illegal
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sherman antitrust act
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__= evolving standard by which antitrust cases are decided, requiring not only the existence of monopoly power but also the intent to restrict trade
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rule of reason
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__= law passed in 1914 in the US to prevent monopolies from forging thru mergers
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clayton antitrust act
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__= gvt agency established to help enforce antitrust legislation; shares responsibility w/ antirust division of the justice dept
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FTC or federal trade commission
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__= action on the part of one firm to set a price below its shutdown point in order to drive competitors out of business
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predatory pricing
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__= division of the justice dept that enforces antitrust legislation along with the FTC
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antitrust division of the justice dept
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__= index ranging from 0-10000 indicating the concentration in an industry; calculated by summing the squares of the market shares of all the firms in the industry
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HHI or herfindahl-hirschman index
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__= market in which the threat of competition in enough to encourage firms to act like competitors
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contestable market
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__= difference btw price and marginal cost divided by the price; index is indicator of market power where index of 0 indicates no market power, but higher indicates greater power
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price cost margin
(P-MC)/P |
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__= demarcation of a geographic region and a category of goods or services in which firms compete
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market definition
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___= combining of 2 firms that sell the same good/type of good
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horizontal merger
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___= combining of 2 firms, one of which supplies goods to the other
-firm merges withsupplier |
vertical merger
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__= the situation in which firms conspire to set prices for goods sold in the same market
- is a serious offense/illlegal |
price fixing
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__= penalties awarded to the injured party equal to 3 times the value of the injury
-helps deter price fixing |
treble damages
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__= regions over which a manufacturer limits the distribution or selling of its products to one retailer/wholesaler
-manufacturer gives certain exclusive rights to certain retailers/wholesalers to sell that product in a given area |
exclusive territories
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__= condition of a contract by which a manufacturer does not allow a retailer to sell goods made by a competing manufacturer
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exclusive dealing
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__= situatin in which a producer sets a list price and does not allow the retailer to offer a discount to consumers
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resale price maintenance
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__= a regulatory method that stipulates that the firm charge a price that equals marginal cost
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marginal cost pricing
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__= reg. method that stipulates that the firm charge a price that equals average total cost
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average total cost pricing
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__= regulatory method to lower ATC, sets prices for several years ahead and then allows ths firm to keep any additional profits or suffer any losses over that period of time
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incentive regulation
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__= begun in the late 1970's, the drive to reduce the gvts regulations controlling prices and entry into many industries
-lifting of price regulations |
deregulation mvts
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