Pure competition Market structure in which a large number of firms all produce the same product and no single seller controls the supply or prices also called perfect competition commodity A product such as petroleum or milk that is considered the same no matter who produces or sells it ID: 1028191
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1. Competition and Market Structures
2. Pure competitionMarket structure in which a large number of firms all produce the same product and no single seller controls the supply or prices; also called perfect competition
3. commodityA product, such as petroleum or milk that is considered the same no matter who produces or sells it
4. Barrier to entryAny factor that makes it difficult for a new firm to enter a market
5. Imperfect competitionA market that fails to meet the conditions of pure competition
6. Start-up costThe expenses a new business must pay before it can begin to produce and sell goods
7. monopolyA market in which a single seller dominates
8. Economies of scaleCharacteristics that cause a producer’s average cost per unit to drop as production rises
9. Natural monopolyA market, that runs most efficiently when one large firm provides all of the production
10. Government monopolyA monopoly created by the government
11. patentA government license that gives the inventor of a new product the exclusive right to produce it and sell it
12. franchiseA contract that gives a single firm the right to sell its goods within an exclusive market
13. Price administrationThe division of consumers into groups based on how much they will pay for a good
14. Market powerThe ability of a company to control prices and total market output
15. Monopolistic competitionA market structure in which many companies sell products that are similar but not identical
16. differentiationMaking a product different from. Other similar products
17. Non-price competitionA way to attract through style, service, or locations, rather than a lower price
18. oligopolyA market in which few large firms dominate the market
19. Price warA series of competitive cuts that lowers the market price below the cost of production
20. collusionAn illegal agreement among firms to to divide the markets, set prices, or limit production
21. cartelA formal organization of producers that agree to coordinate price and production
22. Predatory pricingSelling a product below cost for a short period of time to drive competitors out of the market
23. Anti-trust LawsLaws that encourage competition in the marketplace
24. mergerWhen two or more companies join to form a single firm
25. deregulationThe removal of government control over a market