Market Structures
What is nonprice competition?
Competing for customers without changing the price
Monopolies and oligopolies are examples of what kind of market failure?
Not enough competition
What is the first law that allowed the Govt. to break up monopolies
Sherman Anti-Trust Act
What is an externality?
Side effect that effects a 3rd party
Which market structure uses interdependent decision making?
Oligopoly
What is the difference between pure and monopolistic competition?
Monopolistic competition doesn't have identical products
Define Public Good
something that is consumed collectively
The requirement that businesses reveal certain information to the public
Public disclosure
Provide an example of a negative externality, how can the government limit or prevent it?
Pollution
Tax, regulate or ban it
Using cost benefit analysis, what is the best option?
Option A
What 3 features make pure competition?
Many buyers and sellers, identical products, free entry and exit
Define Market failure
When a flaw in a market system prevents efficient allocation of resources
What three ways does the Govt. protect competition?
Breaking up monopolies, preventing monopolies from forming, regulating monopolies
Provide an example of a positive externality, what can the government do to encourage it?
Education, research & development
Subsidies, create awareness programs
Using the Pay-Off Matrix, if Ryan charges a low price, and Brian charges a high price, what will Ryan's profits be?
$200
What is collusion?
an illegal agreement to fix prices, limit output, or divide markets
What is resource immobility?
When resources can't or won't move to markets with higher returns
Name a federal agency and provide one thing it does to benefit consumers
Various answers
Spillover effects are the same as what word?
Externality
Using the Pay-Off Matrix, if Ryan charges a high price, and Brian charges a high price, what will Ryan's revenue be?
$300
Rank the 4 market structures in order from most to least competitive
Pure Competition, Monopolistic Competition, Oligopoly, Monopoly
What are the 5 causes of market failures?
Not enough Competition, Information, or Public goods, Resource immobility, externalities
Why is the US a a modified free-enterprise system?
Govt. Regulates many aspects of the economy, allowing and encouraging competition and also protecting consumers
What is an example of a negative externality that isn't pollution that you can think of?
Various Answers
Patents and copyrights are an example of which type of monopoly?
Technological Monopoly