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16 terms

econ chap 7 vocab

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perfect competition
a market structure in which a large number of firms all produce the same product
commodity
a product that is the same no matter who produces it, such as petroleum, notebook paper, or milk
barrier to entry
Any factor that makes it difficult for a new firm to enter a market
imperfect competition
a market structure that does not meet the conditions of perfect competition
start up costs
the expenses a firm must pay before it can begin to produce and sell goods
monopoly
(economics) a market in which there are many buyers but only one seller
economies of scale
factors that cause a producer's average cost per unit to fall as output rises
natural monoploy
A market that runs most efficiently when 1 large firm supplies all of the output
government monopoly
a monopoly created by the government
patent
a license that gives the inventor of a new product the exclusive right to sell it for a certain period of time
franchise
The right to sell a good or service within an exclusive market
license
a government issued right to operate a business
price discrimination
Division of customers into groups based on how much they will pay for a good
market power
the ability of a company to change prices and output like a monopolist
monopolistic competition
a market structure in which many companies sell products that are similar but not identical
differentiation
making a product different from other similar products