Market Structures
The four major market structures in Economics
What is Perfect Competition, Monopolistic Competition, Oligopolies, and Monopolies?
Monopolies can harm consumers by doing this.
What is to raise cost and price gouge customers?
Market Power
What is the ability of a company to control prices and output?
Barriers to entry
What are high start up cost and a complex technology field?
Both of these market structures would be considered PRICE SETTERS
What are Monopolies and Oligopolies?
Many firms are part of this market of price takers.. even though they have some variety
What is monopolistic competition?
An association by producers established to coordinate prices and production.
What is a Cartel?
The reason two major companies would try to merge
What is to get closer to achieving a monopoly and gain more control over the market?
Incentives
What are perceived benefits that encourage certain behaviors? (LIKE BUYING MORE)
Easy to enter these types of markets
What are perfect competition and monopolistic competition?
The four conditions for perfect competition
What is many sellers and many buyers, identical products, informed buyers and sellers, and free market entry and exit (Low barriers to entry)
What is a Natural Monopoly?
The main two goals of the federal government passing antitrust legislation
What is to break up monopolies and encourage competition?
Oligopoly
What is a market structure where a handful of large powerful firms dominate the market?
Characterized by having many businesses in the market
What are Perfect Competition and Monopolistic Competition?
Non-price competition is a way to bring customers in without changing price. Name the four types of non-price competition.
What are Characteristics of goods, Location of sale, Service level, and Advertising image?
An agreement among members of an oligopoly to set prices and production levels.
What is Collusion?
A government monopoly is a monopoly created by the government. Name the three types of government monopolies.
What is:
Technological Monopolies (Gov grants patents)?
Franchises/Licenses (McDonalds)?
Industrial Organizations (NFL)?
Price Discrimination
What is the division of customers into groups based on how much they will pay for a good?
No variety of goods/services
Perfect Competition and Monopoly
The beneficiary of a purely competitive market structure.
What is CONSUMERS because firms of a purely competitive market are price takers?
Economic Profit for a Monopoly
What is a monopolist sets output at a point where marginal revenue=marginal cost? (MR=MC)
Government policies for promoting economic competition. (4 of them)
What are Blocking Mergers, Breaking up Monopolies, Regulate Business Practices, and Preserve Incentives.
Deregulation
The removal of some government controls over a market.