Market Structures
The Power of One
Competition
Johnny Law
Market Forces
The Real World
100
This type of market structure runs most efficiently when one large firm supplies all of the output.
What is a monopoly?
100
This is the practice of setting the price for a good below the production cost in order to drive other competitors out of a market.
What is predatory pricing?
100
In a perfectly competitive market, producing firms have this much control over price.
What is none?
100
These types of laws regulate business practices in order to encourage competition.
What are antitrust laws?
100
This type of organization often fails due to the difficulty of keeping its members from exceeding their agreed production output.
What is a Cartel?
100
Walmart is an example of a firm that operates in this type of market structure.
What is oligopoly?
200
This type of market structure exists when many buyers and sellers participate in the market, buyers and sellers are well informed about products, and sellers are able to enter and exit the market freely.
What is perfect competition?
200
This term describes the practice of a monopoly dividing customers into groups based on how much they will pay for a good.
What is price discrimination?
200
The ability of a firm to make its products or services stand out from competitors is known by this term.
What is differentiation?
200
This practice of secret cooperation among firms to deceive or gain an advantage is generally illegal in most markets.
What is collusion?
200
This term describes a raw material or primary agricultural product that can be bought and sold.
What is a commodity?
200
The Arizona Cardinals and the Phoenix Suns are members of these examples of monopolies that the U.S. generally permits.
What are professional sports leagues?
300
This type of market structure is characterized by a market dominated by a few large firms.
What is oligopoly?
300
For the past 30 years, water, electricity, and landline phone service have largely been examples of this type of monopoly.
What is a natural monopoly?
300
Training and licensing requirements; costs involved with creating infrastructure in order to provide goods or services; and start-up costs such as renting store space and hiring staff are all examples of these issues that limit competition.
What are barriers to entry?
300
The elimination of some or all government rules that restrict a particular industry is known by this term.
What is deregulation?
300
When a firm's average total cost decreases as production increases, the firm is benefiting from these economic effects.
What are economies of scale?
300
These are two examples of industries that have been subject to deregulation in recent years.
What are airlines and telecommunications?
Also accepted: banking, media, entertainment
400
Many companies selling similar but not identical products are typical of this market structure.
What is monopolistic competition?
400
Franchises, patents, and licensing are all legal constructs that lead to this type of monopoly.
What is a government monopoly?
400
These are the four basic types of nonprice competition.
400
This is an agreement, enforceable by contract law, that allows someone to use a business's name and system.
What is a franchise?
400
This term is used to describe the ability of a company to control prices and output.
What is Market Power?
400
The grocery market in Ajo, Arizona, with just two supermarkets and a few small minimarts would be described by this market structure.
What is an oligopoly?
500
Market structures such as perfect competition, monopoly, and oligopoly exist within this larger type of economic system.
What is the free market or capitalism?
500
A monopoly will set its production at a level where marginal cost is equal to this.
What is marginal revenue?
500
If a monopolistically competitive firm begins to charge an excessive price for its product, consumers will respond by doing this.
What is purchasing a rival firm's product?
500
This law gives the federal government the power to prevent monopolies and mergers that interfere with trade between states.
What is the Sherman Antitrust Act?
500
These four conditions must be met in order for monopolistic competition to exist in a market.
500
The market for the sale of bookbags (backpacks) is an example of this type of market structure.
What is monopolistic competition?