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34 Cards in this Set

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  • Back
When is a buyer NOT willling to spend a lot of time and energy researching the market?
when the savings to be made are small
What kind of market runs most efficiently when one large firm supplies all of the output?
a natural monopoly
What is one kind of monopoly that the U.S. government generally permits?
professional sports leagues
How does a company arrange to sell its products to people who are unwilling to pay the top price for them?
by charging different prices according to the group to which the buyer belongs
What is a monopolistic competition?
many companies selling similar but not identical products
Which of the following is NOT a form of nonprice competition?
discounts
What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?
consumers will substitute a rival's product
When the government deregulates a product or service, what happens to it?
some government regulations over the industry are eliminated
Cartels are difficult to operate for which of the following reasons?
They work only if members keeep to their agreed output
Why does the government sometimes give monopoly power to a company by issuing a patent?
the company can then profit from their research without competition
Which of the following is NOT a condition for perfect competition?
sellers offer a wide variety of products
How does natural monopoly function?
a single firm supplies all the output
Why are cartels difficult to operate successfully?
they work only if members keep to their agreed output
Which of the following industries have been deregulated in recent years?
airlines
Which of the following is a product that is considered a commodity?
feed corn for cattle
Which of the following is NOT a form of nonprice competition?
discounts
What is the definition of an oligopoly?
two to four firms producing 70 percent to 80 percent of the output
What is one effect that the internet has had on business?
it has reduced start-up costs for many businesses
oligopoly
a market structure in which a few large firms dominate a market
perfect competition
a market structure in which a large number of firms all produce the same product
price war
a series of competitive price cuts that lowers the market price below the cost of production
economies of scale
factors that cause a producer's average cost per unit to fall as output rises
trust
an illegal grouping of companies that discourages competition
franchise
the right to sell a good or service within an exculusive market
differentiation
making a product unlike other products
barrier to entry
any factor that makes it difficult for a new firm to become part of a market
merger
combination of two or more companies into a single firm
deregulation
the removal of some government controls over a market
monopoly
a market dominated by a single seller
patent
a license that gives the inventor of a new product the exclusive right to sell it for a certain period of time
start-up costs
the expenses a firm must pay before it can begin to produce and sell goods
price discrimination
division of customers into groups based on how much they will pay for a good
commodity
a product that is considered the same no matter who produces it
license
a government-issued right to operate a business