| A | B |
|---|
| monopoly | a market in which a single seller exercises exclusive or nearly exclusive control over a particular good or service |
| interdependent pricing | being very responsive to or dependent on the pricing actions of competitors |
| monopolistic competition | where sellers offer different, rather than identical products |
| technological monolopy | a market that is dominated by a single producer because of new technology it has developed |
| natural monopoly | a market in which competition is inconvenient and impractical, and thus efficiency is best achieved by a single seller |
| geographic monopoly | a market whose geographic area is so limited that a single seller can control an item's manufacture, sale, distribution or price |
| product differentiation | the creation of real or imagined differences in products |
| copyright | a grant to publish, duplicate, perform, display or sell a creative work |
| nonprice competition | competing on a basis other than price |
| price war | when sellers agressively undercut each other's price |
| oligopoly | a market dominated by a few sellers |
| perfect competition | an ideal market in which consumers and producers each compete directly and fully under the laws of supply and demand |
| government monopoly | a market in which a government is the sole producer or seller of a product |
| economies of scale | a condition in which, because of the level of resources needed, the cost of producing each unit of a product declines as the total number of units produced increases |
| patent | a grant to exclusively produce, use, rent, or sell an invention or discovery |
| buyers | consumers |
| sellers | producers |
| Under perfect competition, sellers offer | identical products |
| In what way does monopolistic competition differ from perfect competition? | sellers offer different, rather than identical products |
| Under monopolistic competition, sellers use | product differentiation to set their products apart |
| Advertising and emphasizing brand names are examples of what kind of competition? | nonprice |
| The most common type of noncompetitive market in the US | oligopoly |
| Public and private utility companies are examples of what kind of monoplies? | natural |
| A general store in a remote community probably has what type of monopoly? | geographic |
| If the government is the sole seller of a product what type of monopoly is it? | government |
| What kind of monopoly arises when a producer develops new technology that creates a new product or changes the way an existing product is made? | technological |
| Another name for a huge monopoly | trust |
| Four conditions for perfect competition | (1) Many buyers and sellers acting independently (2) Sellers offer identical products (3) Buyers are well informed about products (4) Sellers are able to enter and exit the market easily |
| What three forces limit a monopolist's control over prices? | (1) If they raise the price too high, demand will fall (2) If they make enormous profits, some other company will find a way around the barriers to entry and enter the market (3) The government will regulate them if they abuse their power over the market |
| What are the barriers to entry into a market? | (1) start-up costs (2) level of technical knowledge needed(3) amount of control held by existing companies in the market. The existence of any one of these barriers usually leads to the development of a monopoly or oligopoly. Competitive markets require no barriers to entry. |
| The antitrust law that was created in 1887 that was designed to oversee the railroad freight business to protect farmers and merchants. It was abolished in 1995 | Interstate Commerce Act |
| The antitrust law that was signed by President Harrison. It fought against trusts, set the tone for antitrust legislation, but many monopolies avoided punishment by the law. | Sherman Antitrust Act |
| The antitrust law that was introduced by Senator Henry Clayton and passed in 1914. It addressed and prohibited price discrimination. | Clayton Antitrust Act |
| The antitrust law that was signed into law by President Woodrow Wilson in 1914 that created the FTC and investigates unfair competition and trade practices. | Federal Trade Commission Act |
| The antitrust law that was passed in 1936 to prevent unfair competition. It was also called the anti-price discrimination act. | Robinson-Patman Act |
