competition and markets structures

competition and markets structures

pure competition and market structures

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trusts: illegal combinations of corporations or companies organized to supress competition

restrained: limited the activity or growth of

price discrimination: practice of charging customers different prices for the same product.

cease and desist order: ruling requiring a company to stop an unfair business practice that reduces or limits competition.

economies of scale: increasingly efficient use of personnel, plant, and equipment that lowers the averages cost of production as a firm becomes larger.

public disclosure: requirement forcing a business to reveal information about its products or its operations to the public.

market failure: condition where any of the requirements for a competitive market--

adequate competition, knowledge of prices and of prices and opportunities, mobility of resources, and competitive profits are lacking.

public good: economic products that are consumed collectively, such as highways, national defense, police and fire protection.

sustain: to support or hold up.

spillover effects: uncompensated side effects that either benefit or harm a third party not involved in the activity that caused it.

externalities: uncompensated side effects that affect an uninvolved third parties.

cost-benefits analysis: calculation that compares the cost of an action to its benefits.

mortgage: legal document that pledges ownership of a home to a lender as security for repayment of borrowed money.

foreclosure: process in which a lender reclaims the property due to lack of payment by the borrower.

intervention: involvement in a situation to alter the outcome.

market structure: market classification according to number and size of firms, and type of product, and type of competition; nature and degree of competition among firms in the same industry.

pure competition: a theoretical market structure that requires three major conditions: very large number of buyers and sellers, identical products, and freedom of entry and exit

theoretical: existing only in theory; not practical.

industry: group of firms producing similar or identical products.

perfect competition: theoretical market structure characterized by a large number of well informed independent buyers & sellers who exchange identical products and wave freedom of entry and exit.

product differentiation: real or imagined differences between competing products in the same industry.

nonprice competition: competition based on a product's appearance, quality, or design, rather than its price.

monopoly: market characterized by a single producer; form of imperfect competition.

laissez-faire: philosophy that government should not interfere with business activity.

natural monopoly: market structure in which average costs of production are lowest when all output is produced by a single firm.

geographic monopoly: market structure in which a firm has monopoly because of its location or the small size of the market.

technological monopoly: market structure in which a firm has a monopoly because it owns or controls a manufacturing method, process, or other scientific advantage

government monopoly: monopoly created and/or owned by the government.

equate: to represent as equal or equivalent.

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