Economics: Chapter 10

9 terms by hopatowsky 

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pure monopoly

a single firm is the sole producer of a product for which there are no close substitutes

barriers to entry

factors that prohibit firms from entering an industry

simultaneous consumption

a producer's ability to satisfy a large number of consumers at one time

network effects

increases in the value of a product to each user, including existing users, as the total number of users rises

X-inefficiency

the production of output, whatever its level, at a higher average (and total) cost than is necessary for producing that level of output

rent-seeking behavior

any activity designed to transfer income or wealth to a particular firm or resource supplier at someone else's, or even society's, expense

price discrimination

the practice of selling a specific product at more than one price when the price differences are not justified by cost differences

socially optimal price

the price that achieves allocative efficiency

fair-return price

the price of a product that enables its producer to obtain a normal profit and that is equal to the average total cost of producing it

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