| A | B |
|---|
| laissez-faire | philosophy that government should not interfere with business activity |
| perfect competition | market structure characterized by a large number of well-informed independent buyers and sellers who exchange identical products |
| imperfect competition | market structure where all conditions of pure competition are not met; monopolistic competition, oligopoly, and monopoly |
| monopolistic competition | market structure having all conditions of pure competition except for identical products; form of imperfect competition |
| product differentiation | real or imagined differences between competing products in the same industry |
| oligopoly | market structure in which a few large sellers dominate and have the ability to affect prices in the industry; form of imperfect competition |
| price-fixing | agreements, usually illegal, by firms to charge a uniform price for a product |
| monopoly | market structure characterized by a single producer; form of imperfect competition |
| natural monopoly | market where average costs are lowest when all output is produced by a single firm |
| economies of scale | increasingly efficient use of personnel, plant, and equipment as a firm becomes larger |
| geographic monopoly | market situation where a firm has a monopoly because of its location |
| technological monopoly | market situation where a firm has a monopoly because it owns or controls a manufacturing method, process, or other scientific advance |
| government monopoly | monopoly created and/or owned by the government |
| market failure | market where any of the requirements for a competitive market - adequate competition, knowledge of prices and opportunities, mobility of resources, and competitive profits - are lacking |
| negative externality | harmful side effect that affects an uninvolved third party; external cost |
| positive externality | beneficial side effect that affects an uninvolved third party |
| public goods | economic product that is consumed collectively; highways, national defense, police and fire protection |
| price discrimination | illegal practice of charging customers different prices for the same product |
| trust | illegal combination of corporation or companies organized to hinder competition |
