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18 Cards in this Set
- Front
- Back
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Antitrust |
Government intervention to alter market structure or prevent abuse of market power. |
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Barries to entry |
Obstacles such as Patents, Regulations and Lawsuits, Acquisitions, Distribution and Input Control -
that make it difficult or impossible for would be competitors to enter a market. |
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Cartel |
A group of firms with an explicit, formal agreement to fix prices and output shares in a particular market |
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Concentration Ratio |
The proportion of total industry output controlled by the largest firms. |
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Economic Cost |
The value of all resources used to produce a good or service.
Opportunity Cost |
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Economic Profit |
The difference between total revenue and total economic cost. |
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Economies of Scale |
Reductions in average total costs that come through the increases of the size of the plant and equipment. |
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Natural Monopoly |
An industry in which one firm can achieve economies of scale over the entire range of market supply |
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Predatory Pricing |
Temporary price reductions that are designed to alter market share or to drive competitors out of the market. |
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Product Differentiation |
Features that make one product appear different from competing products in the same market. |
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Repurchase rate |
Measure of brand loyalty, tendency to repurchase the same brand. |
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Economic Profit |
Total Revenue - Total Economic Cost |
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Profit Per Unit |
Price - Average Total Cost |
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Major Market Structure Characteristics |
1) Number of Firms 2) Barriers to Entry 3) Market Power 4) Type of Product |
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Types of Market Structure |
1) Perfect Competition 2) Monopolistic Competition 3) Oligopoly 4) Duopoly 5) Monopoly |
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The Sherman Act |
1890
The Sherman Act prohibits "Conspiracies in restraint of trade" Including mergers, contracts or acquisitions that threaten to monopolize an industry. |
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The Clayton Act |
1914
Passed to outlaw specific antitrust behavior not outlined in the Sherman act. Prevent monopolies. Prohibited price discrimination, exclusive dealing agreements, certain types of mergers, and interlocking boards of directors among competing firms. |
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The federal trade commission act |
An agency to study industry structures and behavior so as to identify anticompetitive practices |
