Economics- Chapter 7: Market Structures

12 cards

Idk Anything Abouts This.

Preview Flashcards

Front Back
What is perfect competition?
An ideal market structure buyers and sellers compete fully under the laws of supply and demand. (fruit)
What is a monopolistic competition?
Same as perfect competition, except sellers offer similar, instead of identical products. (coke)
What is an oligopoly?
Exists when a few large sellers control most of the market (possible 70%) (Cereal)
What is a monopoly?
When a single seller controls the entire market. (electronic)
What is a natural monopoly?
This is where competition is naturally inconvenient of impractical. (railroads)
What is geographic monopoly?
When the potential for profit is limited by location (Jimmy Jim's antique store)
What is a technological monopoly?
When a producer develops new technology that enables the creation of a new product. (
What is a government monopoly?
Any product where the government is sole seller of a product.
What is a price leadership? (oligopoly)
Part of interdependent pricing. One company will raise the price and hope the others follow.
What is price war? (oligopoly)
If the other companies do not raise prices a war could be set off where each company undercuts each other.
What is a collusion (oligopoly)
The illegal act of secret agreements between companies to set production levels, and price.
What is a cartel? (oligopoly)
Illegal in the U.S., this is where companies openly organize price levels and market sharing.