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25 Cards in this Set
- Front
- Back
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philosophy that government should not interfere with commerce or trade
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laissez-faire
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nature and degree of competition among firms operating in the same industry
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market structure
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characterized by a large number of well-informed independent buyers and sellers who exchange identical products.
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perfect competition
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name given to a market structure that lacks one or more of the conditions of perfect competition
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imperfect competition
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the market structure that has all the conditions of perfect competition except for identical products
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monopolistic competition
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real or imagined differences between competing products in the same industry
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product differentiation
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use of advertising, giveaways, or other promotional campaigns to convince buyers that the product is somehow better than another.
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nonprice competition
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market structure in which a few very large sellersdominate the industry
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oligopoly
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formal aggreement to set prices or to otherwise behave in a cooperative manner
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collusion
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agreeing to change the same or similar prices for a product
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price-fixing
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market structure with only one seller of a particular product
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monopoly
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natural situation where the costs of production are minimized by having a single firm produce the product
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natural monopoly
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situation in which the average cost of production falls as the firm gets larger
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economics of scale
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monopoly based on the absense of other sellers in a certain geographic area
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geographic monopoly
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monopoly that is based on ownership or control of a manufacturing method, process, or other scientific advances
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technological monopoly
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monopoly the goverment owns and operates
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government monopoly
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can occur when any of these 4 conditions are significantly altered
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market failure
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unintended side effect that either benefits or harms a 3rd party not involved in the activity that caused it
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externality
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the harm, cost, or inconvenience suffered by a 3rd party because of actions by others.
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negative externality
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benefit received by someone who had nothing to do with the activity that generated the benefit
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positive externality
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products that are collectively consumed by everyone and whose use by one individual does not diminish the satisfaction or value available to others
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public goods
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legally formed combinations of corporations or companies
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trusts
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practice of charging customers different prices for the same product
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price discrimination
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FTC ruling requiring a company to stop anunfair business practice suc as price-fixing that reduces or limits competition among firms
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cease and desist order
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requirement that businesses reveal information to the public
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public disclosure
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