Market Structures
“This market has many firms, identical products, and is considered perfectly efficient.”
What is perfect competition?
“What gives a monopoly its power to control the market?”
What are high barriers to entry?
Satisfaction gained from consuming goods or services.”
What is utility?
“The limit on what a consumer can spend based on income and prices.”
What is a budget constraint?
“Governments impose these to raise revenue and influence behavior in markets.”
What are taxes?
“A single firm dominates the market, sets the price, and faces high entry barriers.”
What is a monopoly?
“This is one way a monopoly can hurt consumers.”
What is higher prices or reduced output?
“Additional satisfaction from one more unit of a good.”
What is marginal utility?
“Because resources are limited, consumers must make these when deciding what to buy.”
What are choices?
“These are rules set by government to correct market failures and protect consumers.”
What are regulations?
“Just a few large firms dominate; they may collude or act interdependently.”
What is an oligopoly?
“An example of a monopoly in many local markets.”
What is a utility company?
“This law states that each additional unit consumed gives less added satisfaction.”
What is the law of diminishing marginal utility?
“If you choose a combination of goods that falls below this line, you are…”
What is ‘under budget’?
“Example: A law requiring seat-belts in cars is a type of…”
What is regulation?
“Many firms, differentiated products, some price power – this structure uses advertising and branding.”
What is monopolistic competition?
“The cost to society from inefficiency when a monopoly reduces output.
What is deadweight loss?
“Example: The first slice of pizza tastes great; the fifth slice tastes less good — this illustrates...”
What is diminishing marginal utility?
“You’ll draw this line to show all combinations of two goods that you can afford.”
What is a budget line?
When a tax increases price and reduces quantity, the lost efficiency is called…”
What is deadweight loss?
“Unlike perfect competition, this market structure allows firms to set price because products are differentiated.”
What is monopolistic competition?
“Governments may do this to monopolies to promote competition.”
What is regulate or break up?
“Consumers make decisions to maximize this, subject to their budget.”
What is utility (or total satisfaction)?
“Choosing one good over another because you can’t afford both at once is an example of…”
What is opportunity cost?
"When a firm’s market power is too strong, government might do this to restore competition.”
What is regulation or dissolution?