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Definition
| a market in which a single firm sells a product that does not have any close substitutes |
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Definition
| the ability of a firm to affect the price of its product |
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Definition
| something that prevents firms from entering a profitable market |
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Definition
| the exclusive right to sell a new good for some period of time |
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Definition
| the value of a product to a consumer increases with the number of other consumers who use it |
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Definition
| a market in which the economies of scale in production are so large that only a single large firm can earn a profit |
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Definition
| the process of using public policy to gain economic profit |
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Definition
| the practice of selling a good at different prices to different consumers |
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Definition
| a market served by many firms that sell slightly different products |
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Definition
| a market served by a few firms |
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Term
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Definition
| the study of decision making in strategic situations |
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Term
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Definition
| increase the level of an activity as long as its marginal benefit exceeds its marginal cost. choose the level at which the marginal benefit equals the marginal cost |
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Definition
| the process used by firms to distinguishing their products from the products of competing firms |
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Definition
| the percentage of the market output produced by the largest firms. |
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Definition
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Definition
| a group of firms that act in unison coordinating their price and quantity decisions |
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Definition
| an arrangement in which firms comspire to fix prices |
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Term
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Definition
| a graphical representation of the consequences of different actions in a strategic setting |
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Term
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Definition
| an action that is the best choice for a player, no matter what the other player does. |
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Term
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Definition
| a situation in which both firms in a market would be better off if both chose the high price, but each chooses the low price |
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Term
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Definition
| an outcome of a game in which each player is doing the best he or she can, given the action of the other players |
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Definition
| a promise to match a lower price of a competitor |
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Definition
| a strategy where a firm respons to underpricing by choosing a price so low that each firm makes zero economic profit |
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Definition
| a strategy where one firm chooses whatever price the other firm chose in the preceding period |
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Term
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Definition
| the strategy of reducing the price to deter entry |
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Term
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Definition
| a market with low entry and exit costs |
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Term
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Definition
| increase the level of an activity as long as its marginal benefit exceeds its marginal cost. choose the level at which the marginal benefit equals the marginal cost |
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Term
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Definition
| an arrangement under which the owners of several complnies transfer their decision-making powers to a small group of trustees |
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Definition
| a process in which two or more firms combine their operations |
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Definition
| a business practice under which a business requires a consumer of one product to purchase another product |
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Definition
| a firm sells a product at a price below its production cost to drive a rival out of business and then increases the price |
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Term
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Definition
| a situation in which one side of the marker- either buyers or sellers - has better information than the other |
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Term
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Definition
| a market in which goods of different qualities are sold for the some price |
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Term
| adverse selection problem |
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Definition
| a situation in which the unimformed side of the market must choose from am undesirable or adverse selection of goods |
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Term
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Definition
| a market in which some high quality goods are sold but fewer than would be sold in a market with perfect information |
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Term
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Definition
| a situation i which one side of an ecomonic relationship takes undesirable or costly actions that the other side of the relationship cannot observe |
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Term
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Definition
| a benefit from a good experienced by someone other than the person who buys the good |
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Term
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Definition
| a good that is available for everyone to comsume regardless of who pays and who doesn't ; a good that is nonrival in consumption and nonexcludable |
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Definition
| a good that is consumed by a single person or household; a good that is rival in consumption and excludable |
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Definition
| a person who gets the benefit from a good but does not pay for it |
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Term
| principle of voluntary exchange |
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Definition
| a voluntary exchange between two people makes both people better off |
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Term
| private cost of production |
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Definition
| the production cost borne by a producer which typically includes the costs of labor, capital and materials |
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Term
| external cost of production |
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Definition
| a cost incurred by someone other than the producer |
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Definition
| private cost plus extermal cost |
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Definition
| a tax or charge of equal to the external cost per unit of pollution |
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Term
| marketable pollution permits |
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Definition
| a system under wich the government picks a target pollution level for a particular area, issues just enough pollution permits to meet the pollution target, and allows firms to buy and sell the permits; also known as a cap and trade system |
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