| A | B |
|---|
| Perfect competition | a market structure in which a large number of firms all produce the same product |
| Commodity | a product that is the same no matter who produces it, such as petroleum, notebook paper, or milk |
| barrier to Entry | any factor that makes it difficult for a new firm to enter a market |
| Imperfect Competition | A market structure that does not meet the conditions of perfect competition |
| Start-up costs | the expenses a firm must pay before it can begin to produce and sell goods |
| Monopoly | a market dominated by a single seller |
| economies of scale | factors that cause a producer's average cost per unit to fall as output rises |
| natural monopoly | a market that runs most efficiently when one large firm supplies all of the output |
| Government monopoly | a monopoly created by the government (utility) |
| Patent | a liscense that gives the inventor of a new product the exclusive right to sell it for a certain period of time |
| Franchise | the right to sell a good or service within an exclusive market |
| license | a government-issued right to operate a business |
| Price Discrimination | division of customers into groups based on how much they will pay for a good |
| Market power | the ability of a company to change prices and output like a monopolist |
| Monopolistic Competition | a market structure in which many companies sell products that are similar but not identical |
| Differentiation | making a product different from other similar products |
| Nonprice Competition | a way to attract customers through style, service, or location, but not a lower price |
| Oligopoly | A market structure in which a few large firms dominate a market |
| Price war | a series of competitive price cuts that lowers the market price below the cost of production |
| Collusion | an agreement among firms to divide the market, set prices, or limit production |
| Price Fixing | an agreement among firms to charge one price for the same good |
| Cartel | a formal organization of producers that agree to coordinate prices and production |
| Predatory pricing | selling a product below cost to drive competitors out of the market |
| Antitrust laws | laws that encourage competition in the marketplace |
| Trust | like a cartel, an illegal grouping of companies that discourages competition |
| Merger | Combination of two or more companies into a single firm |
| Deregulation | the removal of some government controls over a market |
