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19 Cards in this Set
- Front
- Back
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barriers to entry
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economic, legal or deliberate obstacles that keep new sellers from entering a market
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natural monopoly
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a monopoly that arises because the minimum efficient scale of the producing unit is large relative to the total market demand
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exclusionary practices
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a firm's getting its suppliers or distributors to agree not to provide goods or services to potential competitors
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predatory pricing
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a powerful seller's temporarily pricing its goods or services below cost, in order to drive weaker competitors wout of business
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dumping
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selling in foreign countries at prices that are below the firm's cost of production
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local monopoly
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a monopoly limited to a specific geographical area
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regulated monopoly
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a monopoly run under government supervision, constrained only by demand conditions
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price maker
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a seller that can set the selling price, constrained only by demand conditions
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rent-seeking behavior
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behavior directed toward getting transfers or favors
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price discrimination
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a seller's charging different prices to different buyers depending on their ability and willingness to pay
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nonprice competition
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competition through activities other than setting prices, such as advertising and location
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concentration ratio
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the share of production, sales or revenues attributable to the largest firms in an industry
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duopoly
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a market wit only two sellers
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payoff matrix
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a table used in game theory to illustrate possible outcomes for each of two players, depending on the strategy that each chooses
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price war
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a situation in which a firm cuts prices in order to try to undercut its rivals, and the rivals react by cutting prices even more
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collusion
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cooperation among potential rivals to gain market power as a group
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tacit collusion
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collusion that takes place without creation of a cartel
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price fixing
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a form of collusion in which a group of sellers implicitly agrees to maintain a common price
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price leadership
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a form of collusion in which many sellers follow the price changes instituted by one particular seller
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