What is the type of government monopolies that is set up by patents?
Government issued right to be the only producer of that product?
Why do gov. grants patented monopolies?
They want yout o profit from research/development
Examples of an industrial monopoly (in gov. monopolies)
Professional sports leagues
2 examples of gov. monopolies by license:
To make your product unlike all of the others -
In a market with only one seller, that seller has a _______
Characteristics that cause a producer's average cost to dropa s production rises are ________
economies of scale
A contract issued by a local authority that gives a single firm the right to sell its goods within an exclusive market is a _______
A monopoly offering targeted discounts is practicing ________
When you charge different groups of people different amounts for the same products =
4 Reasons for Monopolistic Competition Market Structures:
1) Many firms in the market 2) no real strong barriers to entry 3) slight control of price 4) differentiated/similar products
ESSAY QUESTION: Why businesses do "nonprice" and how? 4 reasons:
1) Different physical characteristics (size, color, shape of the product, etc) 2) location (gas, pharmacy, fast food, etc) 3) service (how you take care of the customer/product) 4) advertising image/status (nike, coke, designer purse, etc)
the Curbs on high profits:
1) competition 2) substitute goods
1) wide variety of products at reasonable prices
2-4 businesses that are producing 70-80% of the market =
Conditions encouraging formation of oligopoly:
1) start-up costs 2) economies of scale 3) license/certain level of education
Practices that concern government:
1) price war (cut prices below cost of production) 2) trust (illegal group of companies that discourages companies) 3) cartel -group of businesses that form an oligopoly (drug, oil, etc)
A _____ is most successful when each members agrees and works together to control output
What is deregulation? And name some industries.
Deregulation - removal of some government rules/regulations (airlines, trucking, and bank industry)
What is a merger?
When 2 or more buisnesses become one
Sherman Anti-Trust Act gives government power to stop cartels/monopolies