| Terms |
Definitions |
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non price competition
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attract to customers through style service or location but not lower price
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discounted airfares
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example of market power
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restaurants and hotels
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relys on service level
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sherman anti trust act
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act of 1890
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collusion
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prices and production level set in secret meetings.
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standard oil, american tobacco, american telephone and telegraph
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broken up monopolies by the government
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credatory precise
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set market price below cost for the short term to drive competition out of the market
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natural parks
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example of a concession franchise.
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price leader
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market leader starts price increases or cuts by making these plans clear to other firms.
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GOVT monoply
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monpoly created by the govt.
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patents
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encourages research and development by govt.
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federal trade commission. dept of justces and anti trust divisions
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government agencies
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gas station
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depends on location
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children
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who fly free and stay at hotels free
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cola, cars, movie studios
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examples of oligopolies
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Govt regulations, patent laws, prohibitive cost
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examples of barriors
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companies fined
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first offense of the anti trust law
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cell phone technology
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technology that destroyed a large telephone company
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market power
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the ability of a company to change prices and output like a monopolist
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Time warner cable
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example of a liscenced business.
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Public water works
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example of a natural monopoly
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anti trust laws
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prosecuted and company can be broket up or dissolved
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senoir citizens and children
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these people are targeted for discounts
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major league baseball
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example of an industrial organization
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Perfect Competition
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A large number of items all produce the same product
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liscence
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a govt issued right to a business
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Economies of scale
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factors that cause a producers average cost per unit to fall as output rises
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price discrimination
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division of customers into groups based on how much they will pay for a good.
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cartel
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agreement by a formal organization of producers to coordinate prices and producation
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Mergers
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when two or more companies combine resources to improve profits
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Natural monopoly
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a market that runs most efficiently when one large firm supplies the output.
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Lower consumer price,improved products,efficiency,innovation
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Benefits of competition
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price fixings
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agreement among members of an oligopoly to set prices at the same level
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oligopoly
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a market dominated by a few large profitable firms
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monopolistic competition
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a market structure in which many companies sell products that are similar but not identicle
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Many buyers and sellers, identicle products,buyers and sellers are well-informed,sellers are able to enter and exit market freely
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4 conditions for a perfect market
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deregulation
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removal of some govt controls over a market
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Monopoly
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a market dominated by a single seller
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jeans
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example of a monolistic competition
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Medication for serious illness
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example of a monopoly
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Number of firms:one, Variety of goods:none, Barriors to entry:complete and total, Control over prices:complete and total
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factors needed for a monopoly
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Tomato market
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example of a perfect market
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franchise
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the right to sell a good or service in an exclusive market
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