| A | B |
|---|
| Perfect competition | When pure competition exists with large number of firms producing the same product. The market will be in equilibrium. |
| Commodity | An item that is the same no matter who makes it or sells it. |
| Start-up costs | The costs associated with starting a new business or venture. |
| Monopoly | A single supplier in the marketplace. |
| Economies of Scale | Buying in bulk to control costs and increase profit. Those who practice this strategy may become a monopoly. |
| Natural monopoly | When a market runs most efficiently with only one supplier or producer, this exists. |
| Government monopoly | Monopoly created by the government. |
| Patent | The sole right to sell a new product, service, or idea for a specifiied period of time. |
| Franchise | An agreement or license to sell goods in an exclusive market. |
| Price discrimination | Charging different groups of people different prices for a good or service. |
| Market power | Ability to control prices and output |
| Differentiated products | Characteristics of a product are different and can be compared to another. |
| non-price competition | Location of a shop, characteristics of the product, service level, and advertising form this type of competition. |
| Oligopoly | Market dominated by a few large firms. Less perfect form of a monopoly. |
| Collusion | The act of working together to set prices and production. |
| Price war | When producers compete with others to lower the price. This is a good thing for consumers but bad for producers. |
| Price fixing | Agreement among businesses to sell products for same or similar prices. |
| Cartel | A formal group or organization that uses collusion to control markets. |
| Trust | Single group of several large corporations that seek to control an industry. |
| de-regulation | Government removes rules, laws, restrictions on an industry to stimulate the economy or encourage new entry into the market place. |
