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18 Cards in this Set
- Front
- Back
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Monopoly
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Market with only one seller
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Monopsony
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Market with only one buyer
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Market power
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Ability of a seller or buyer to affect the price of a good
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Marginal revenue
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Change in revenue resulting from a one-unit increase in output
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Lerner Index of Monopoly Power
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Measure of monopoly power calculated as excess of price over marginal cost as a fraction of price
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Barrier to entry
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Condition that impedes entry by new competitors
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Rent seeking
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Spending money in socially unproductive efforts to acquire, maintain, or exercise monopoly
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Natural monopoly
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Firm that can produce the entire output of the market at a cost lower than what it would be if there were several firms
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Rate-of-return regulation
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Maximum price allowed by a regulatory agency is based on the (expected) rate of return that a firm will earn.
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Oligopoly
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Market with only a few buyers
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Monopsony power
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Buyer's ability to affect the price of a good
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Marginal value
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Additional benefit derived from purchasing one more unit of a good
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Marginal Expenditure
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Additional cost of buying one more unit of a good
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Average Expenditure
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Price paid per unit of a good
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Bilateral Monopoly
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Market with only one seller and one buyer
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Antitrust laws
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Rules and regulations prohibiting actions that restrain, or are likely to restrain, competition
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Parallel conduct
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Form of implicit collusion in which one firm consistently follows actions of another
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Predatory Pricing
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Practice of pricing to drive current competitors out of business and to discourage new entrants in a market so that a firm can enjoy higher future profits
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