Economics Market Structures

Flashcards by trsmith56, updated more than 1 year ago
Created by trsmith56 over 7 years ago


Chapter 7 Review

Resource summary

Question Answer
Market structure An economic model of competition among businesses in the same industry.
Cartel A group that acts together to set prices and limit output.
Price maker A firm that does not have to consider competitors when setting the price of its products.
Price taker A business that accepts the market price determined by supply and demand.
Imperfect competition Occurs in markets that have few sellers or products that are not standardized.
Natural monopoly Occurs when the costs of production are lowest with only one producer.
Government monopoly When the government either owns or authorizes only one producer, like the post office.
Technological monopoly Occurs when a firm controls a manufacturing method, invention, or type of technology, like the polaroid instant camera.
Geographic monopoly Exists when there are no other producers within a certain region, like E.W.James.
Merger The joining of two firms to form a single firm.
Economies of Scale This occurs when the average cost of production falls as the producer grows larger.
Patent Gives an inventor the exclusive property rights to an invention or process for a certain number of years.
Focus group A moderated discussion with small groups of consumers.
Sherman Antitrust Act Passed in 1890, it gave the government power to control monopolies.
Price fixing Occurs when businesses agree to set prices for competing products.
Market allocation Occurs when competing businesses divide a market amongst themselves.
Predatory pricing Occurs when businesses set prices below cost for a time to drive competitors out of a market.
Public disclosure Policy that requires businesses to reveal product information.
Deregulation Reduces or removes government control of business.
Perfectly Competitive Market This market has many buyers and sellers but it's not fast food.
Perfectly Competitive Market In this market, the market price and equilibrium price are the same.
Perfectly Competitive Market This market produces a VERY standardized product.
Perfectly Competitive Market Examples of products in this type of market are wheat, corn, and beef.
Monopolistic Market Only one seller in this type of market.
Monopolistic Market The is a very restricted, regulated market structure.
Monopolistic Market This market is a price maker because there are no substitutes.
Monopolistic Competition Many sellers and many buyers, such as the fast food market.
Monopolistic Competition Limited control of prices in this market structure because no one would probably pay $20 for a hamburger!
Monopolistic Competition There are lots of nonprice competition in this market structure.
Oligopoly There are few sellers and many buyers in this market structure.
Oligopoly Examples of products in this market structure include steel, cement, cereal and sodas.
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