ECON CHAP 7 KEY TERMS

Market structure

•  a theoretical market structure that requires three conditions: very large numbers, identical products and freedom of entry and exit

• Theoretical Market structure characterized by large number of well informed independent buyers and sellers who exchange identical products and have freedom of entry and exit 

• market classification according to number ans size firms, type of product and type of competition

•  Market structure in which average cost of production are lowest when all output is produced by a single firm 

Pure competition

• a theoretical market structure that requires three conditions: very large numbers, identical products and freedom of entry and exit

•  Real or imagined differences between competing products in the same industry 

•  market structure having all conditions of peer competition except for identical products. 

• Philosophy that government should not interfere with business activity 

Theoretical

• the supply side of the market 

• done or brought about by free choice

• existing only in theory

• to rise and fall uncertainty 

Industry

• To support or hold up 

•  Economic side effects that affect an uninvolved third party 

•  Illegal combinations of cooperation for companies organized to suppress competition 

•  the supply side of the market 

Perfect competition

• Economic side effects that affect an uninvolved third party 

• Theoretical Market structure characterized by large number of well informed independent buyers and sellers who exchange identical products and have freedom of entry and exit 

• Market structure characterized by a single producer 

• Market structure in which a few large sellers Dominate and have the ability to affect prices in the industry 

Monopolistic competition

• Market structure in which a few large sellers Dominate and have the ability to affect prices in the industry

• Market structure in which average cost of production are lowest when all output is produced by a single firm 

• market structure having all conditions of peer competition except for identical products. 

•  market classification according to number ans size firms, type of product and type of competition

Product differentiation

• Condition where any of the requirements for a competitive market leads to an inefficient allocation of resources characterized by too much or too little being produced 

•  Unattended side effects that either benefit or harm a third party not involved in the activity that caused it

•  Limited the activity or growth of 

• Real or imagined differences between competing products in the same industry 

Nonoprice competition

•  Monopoly created and/or owned by the government 

• Competition based on a product's appearance, quality or design, rather than its price 

• system allocating goods and services without prices 

• highest legal price that can be charges for a product

Oligopoly

• Market structure in which a few large sellers Dominate and have the ability to affect prices in the industry 

• Philosophy that government should not interfere with business activity 

• a theoretical market structure that requires three conditions: very large numbers, identical products and freedom of entry and exit

•  Comparison of the cost of an action to its benefits 

Collusion

•  Let go document that pledges ownership of a home to a lender as security for repayment of borrowed money 

•  Illegal agreement among producers to fix prices, limit output, or divide markets 

• Practice of charging different customers different prices for the same product 

• Illegal combinations of cooperation for companies organized to suppress competition