Market Structures

Question Answer
a theoretical market structure that requires three major conditions: very large numbers of buyers and sellers, identical products, and freedom of entry and exit pure competition
theoretical market structure characterized by a large number of well-informed independent buyers and sellers who exchange identical products and have freedom of entry and exit perfect competition
market structure having all conditions of pure competition except for identical products; a form of imperfect competition monopolistic competition
market structure in which a few large sellers dominate the market and have the ability to affect prices in the industry; form of imperfect competition oligopoly
market structure characterized by a single producer; form of imperfect competition monopoly
illegal agreement among producers to fix prices, limit output, divide markets, or otherwise agree to reduce competition collusion
condition where any of the requirements for a competitive market—usually adequate competition, knowledge of prices and opportunities, mobility of resources, and competitive profits Market Failure
requirement forcing a business to reveal information about its products or its operations to the public public disclosure
legal document that pledges ownership of a home to a lender as security for repayment of borrowed money mortgage
process in which a lender reclaims the property due to a lack of payment by the borrower foreclosure
illegal combinations of corporations or companies organized to suppress competition Trusts
real or imagined differences between competing products in the same industry product differentiation
philosophy that government should not interfere with business activity laissez-faire
market structure in which average costs of production are lowest when all output is produced by a single firm Natural Monopoly
increasingly efficient use of personnel, plant, and equipment that lowers the average cost of production as a firm becomes larger economies of scale