Pure Competition
a market structure in which a large number of firms all produce the same product and no single seller controls supply or prices
What is "Pure Competition"?
characteristics that cause a producer’s average cost per unit to drop as production rises
What is "Economies of Scale"?
a market structure in which many companies sell products that are similar but not identical
What is "Monopolistic Competition"?
selling a product below cost for a short period of time to drive competitors out of the market
What is "Predatory Pricing"?
the division of consumers into groups based on how much they will pay for a good
What is "Price Discrimination'?
a product, such as petroleum or milk, that is considered the same no matter who produces or sells it
What is "Commodity"?
a market that runs most efficiently when one large firm provides all of the output
What is "Natural Monopoly"?
making a product different from other, similar products
What is "Differentiation"?
laws that encourage competition in the marketplace
What is "Antitrust Laws"?
the ability of a company to control prices and total market output
What is "Market Power"?
any factor that makes it difficult for a new firm to enter a market
What is "Barrier to Entry"?
a government license that gives the inventor of a new product the exclusive right to produce and sell it
What is "Patent"?
a way to attract customers through style, service, or location, rather than a lower price
What is "Non-Price Competition"?
an illegal grouping of companies that discourages competition, similar to a cartel
What is "Trust"?
an illegal agreement among firms to divide the market, set prices, or limit production
What is "Collusion"?
a market structure that fails to meet the conditions of pure competition
a contract that gives a single firm the right to sell its good within an exclusive market
What is "Franchise"?
a market structure in which a few large firms dominate a market
What is "Oligopoly"?
when two or more companies join to form a single firm
What is "Merger"?
an agreement among firms to charge one price for the same good
What is "Price Fixing"?
the expenses a new business must pay before it can begin to produce and sell goods
a government-issued right to operate a business
What is "License"?
What is "Price War"?
the removal of government controls over a market
What is "Deregulation"?
a formal organization of producers that agree to coordinate prices and production
What is "Cartel"?