Perfect Competition/Monopolistic Competition
Which of these would be sold in a perfectly competitive market?
Milk
Cars
Designer clothing
Milk
The market for cellphones is a ....
Oligopoly
Sole proprietorship
The main reason that people might buy a gold-plated Rolls Royce instead of a Toyota Corolla, even though it's more expensive
Status/image (non-price discrimination)
The reason that monopolistically competitive firms have little control over their pricing
Lots of competition/substitutes
A market dominated by a single seller
Monopoly
What is liability?
Being responsible if you go into debt or get sued
Why would a government pass antitrust laws?
To stop monopolies + encourage competition
A market where firms have no control over pricing
Perfect competition
A market dominated by a few sellers is a....
Oligopoly
What is the advantage of a limited liability partnership over a limited partnership?
Less liability
What it's called when a company hires another company to do a job for them
Outsourcing
Define monopolistic competition
Many sellers, slightly different products
(each seller has a monopoly on its own product, but is still competing with other producers)
As companies gain market power through mergers, what happens to their control over prices and output?
Increase, increase
A type of business organized to benefit society instead of making profit
Nonprofit
Repealing right-to-work laws would have what effect on employees and unions?
More power
(ability to challenge hiring and firing)
Define perfect competition
Many sellers all selling identical products
To maximize profits, monopolies will ______ output and ______ prices
Limit, increase
Do general partnerships protect against liability?
No
Advertising is a type of _______ competition
Non-price competition