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19 Cards in this Set
- Front
- Back
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Perfect Competition
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A market structure in which many firms produce identical products and entry is easy. Each firm is a price taker. In the long run, firms in this structure earn normal profits
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Profit Maximization
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Occurs where MR = MC
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Break Even Price
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A price that is equal to the minimum point of the average total cost curve.
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Economic Efficiency
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When the price of a agood or service just covers the marginal cost of producing (productive efficiency) that good and people are getting wha t they want (allocative efficiency)
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Monopoly
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A market structure in which there is a single supplier of a product (which has no close substitute). The monopolist has the market power to set prices
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Barrier to entry
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Anything that impededs the ability of firms to bgin a new business in an industry in which existing firms are earning postivie economic profits.
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Natural monopoly
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A monopoly which arises due to economies of scale
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Regulated Monopoloy
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A monopoly whose behavior is monitored and prescribed by a government entity.
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Price discrimination
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Charging different customers at different prices for the same products.
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Monopolistic Competition
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A market structure with a large number of firms producing differentiated products and entry/exit is not difficult
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Non-price competion
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When firms vie for consumer attention, but not with lower prices. Firms may use advertising, packaging, branding, etc.
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Product differentiation
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When a firm makes their good or service SLIGHTLY different from others in the same basic market.
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Game Theory
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A new branch of economic theory built upon models of multiactor strategic behavior
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Dominant Strategy
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A strategy that producers better results no matter what strategy the opposing firm follows.
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Cartel
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An organization of independent firms whose purpose is to control and limit production to increase price and profits.
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Anti-trust policy
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Government policies and programs designed to control the growth of monopoly and enhane competition.
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Market Concentration
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The degree to which a few frms control the output of a particular market.
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Economic Regulation
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The proscription of price and output for a specific industry.
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Social Regulation
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The prescribing of health, safety, performance and environmental standards that apply across several industries.
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