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ECN 201- Ch. 11
Unit 3 Test
17
Economics
Undergraduate 1
11/05/2009

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Term
Imperfect Competition
Definition
competition that does not fit the definition of perfect competition either because it involves a smaller number of firms or only one firm, or products that aren't identical.
Term
Imperfect Competition Flavors
Definition
Monopoly
Oligopoly
Monopolistic Competition
Term
Monopoly
Definition
A firm that faces no competitors.
Term
Monopolistic Competition
Definition
Many firms sell similar but differentiated products.
Term
Oligopoly
Definition
A smaller number of rims sell a similar product but face no other competition
Term
Barriers to Entry
Definition
The legal, technological, or market forces that may discourage or prevent potential competitors from entering a market.
Term
Deregulation
Definition
Eliminating or scaling back government rules on prices that can be charged, quantities that can be produced, or conditions of entry in a certain industry
Term
Patent
Definition
A government rule that gives the inventor the exclusive legal right to make, use, or sell the invention for a limited time
Last for 20 years
Term
Trademark
Definition
A word, name, symbol or device that indicates the source of the goods and can only be used by a firm registered that trademark
Term
Copyright
Definition
A form of legal protection to prevent copying for commercial purposes original authorship, including books and music
Last for lifetime of author plus 70 yrs
Term
Trade secrets
Definition
Methods of production kept secret by the producing firm
Term
Intellectual Property
Definition
The body of law including patents, trademarks, copyrights, and trade secret law that protect the right of inventors to produce and sell their inventions.
Term
Natural Monopoly
Definition
when the quantity demanded in the market is less than the quantity at the bottom of the long-run average cost curve.
Term
Predatory Pricing
Definition
When an existing firm uses sharp but temporary price cuts to discourage new competition
Term
Illustrating Monopoly Profits
STEP 1
Definition
The monopolist determines Its Profit-Maximizing Level of Output
MR=MC
Term
Illustrating Monopoly Profits
STEP 2
Definition
The Monopolist Decides What Price to Charge
Term
Illustrating Monopoly Profits
STEP 3
Definition
Calculate Total Revenue, Total Cost, and Profit
Pg 11<<--Important
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