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9 Cards in this Set
- Front
- Back
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monopoly
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one firm in an industry selling a product for which there are no close substitutes
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barriers to entry
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anything that prevents firms from entering a market
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market power
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a firm's power to set its price without losing its entire share of the market
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price-maker
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a firm that has the power to set its price, rather than taking the price set by the market
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average revenue
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total revenue divided by quantity
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price-cost margin
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the difference between price and marginal cost divided by the price. this index is an indicator of market power, where an index of 0 indicates no market power and a higher price-cost margin indicates greater market power
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natural monopoly
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a single firm in an industry in which ATC is declining over the entire range of production and the minimum efficient scale is larger than the size of the market
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contestable market
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a market in which the threat of competition is enough to encourage firms to act like competitors
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price discrimination
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a situation in which different groups of consumers are charged different prices for the same good
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