Topic 4: Competition & Market Structures Study Guide Questions And Correct Answers

Government monopoly {Ans: Monopoly created by the government}Cartel {Ans: a formal organization of producers that agree to coordinate prices and production}Monopoly (Pure) {Ans: a market structure in which one firm sells a unique product, into which entry is blocked, into which entry is blocked, in which the single firm}Price fixing {Ans: Agreement among firms to sell at the same or similar prices}patent {Ans: (n.) exclusive rights over an invention; copyright; (v.) to arrange or obtain such rights}price maker {Ans: Firms who are able to influence price as their output represents a significant share of the market.}Barriers to entry {Ans: Factors that make it difficult for new firms to enter a market}competition {Ans: the struggle among producers for the dollars of consumers}non-price competition {Ans: a way to attract customers through style, service level, advertising or location, but not a lower price}market power {Ans: the ability of a company to change prices and output like a monopolist}Monopolistic competition {Ans: a market structure in which many companies sell products that are similar but not identical}MR = MC rule {Ans: the principal that a firm will maximize its profit (or minimize its