Economics Vocabulary Chapter 7
Terms
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- the philosophy that governemnt should not interfere with commerce or trade
- laissez-faire
- the nature and degree of competition among firms operating in the same industry
- market structure
- characterized by a large number of well-informed independent buyers and sellers who exchange identical products
- perfect competition
- market structure that lacks one or more of the condition of perfect competition
- imperfect competition
- market structure that has all the conditions of perfect competition except for indentical products
- monopolistic competition
- real or imagined differences between competing products in the same industry
- product differentiation
- use of advertising, giveaways, or other promotional campaigns to convince buyers that the product is somehow better than another brand
- nonprice competition
- market structure in which a few very large sellers dominate the industry
- oligopoly
- formal agreement to set prices or to otherwise behave in a cooperative manner
- collusion
- agreeing to charge the same or similar prices for a product
- price-fixing
- market structure with only one seller of a particular product
- monopoly
- market situation where the costs of production are minimized by having a single firm product the product
- natural monopoly
- situation in which the average cost of production falls as the firm gets larger
- eonomies of scale
- monopoly based on the absence of other sellers in a certain geographic area
- geographic monopoly
- monopoly that is based on ownership or control of a manufacturing method, process, or other scientific advance
- technological monopoly
- monopoly the government owns and operates
- government monopoly
- market where any of the requirements for a competitive market are lacking
- market failure
- unintended side effect that either benefits or harms a third party not involved in the activity that caused it
- externality
- the harm, cost, r inconvenience suffered by a third party because of actions by others
- negative externality
- benefit received by someone who had nothing to do with the activity that generated the benefit
- positive externality
- products that are collectively consumed by everyone, and whose use by one individual does not diminish the satisfaction or value available to others
- public goods
- the practice of charging customers different prices for the same product
- price discrimination
- an FTC ruling requiring a company to stop an unfair business practice, such as price-fixing, that reduces or limits competitin among firms
- cease and desist order
- the requirement that businesses reveal information to the public
- public disclosure
- legally formed combinations of corporations or companies
- trusts