1. Market Structures Review
Economics
Mr. Bordelon

2. Key Terms
_____ is when a monopolist divides consumers into groups and charges different prices for the same good.

3. Key Terms
Price discrimination is when a monopolist divides consumers into groups and charges different prices for the same good.

4. Key Terms
A market with many firms producing the same good is in _____.

5. Key Terms
A market with many firms producing the same good is in perfect competition.

6. Key Terms
Economists define _____ as a market structure with a few large firms, each of which has some market power.

7. Key Terms
Economists define oligopoly as a market structure with a few large firms, each of which has some market power.

8. Key Terms
_____ are products that are identical no matter who produces them.

9. Key Terms
Commodities are products that are identical no matter who produces them.

10. Key Terms
A(n) _____ grants the right to sell an invention without competition.

11. Key Terms
A patent grants the right to sell an invention without competition.

12. Key Terms
A(n) _____ may exist in market where it is most efficient for only one large firm to provide a product.

13. Key Terms
A natural monopoly may exist in market where it is most efficient for only one large firm to provide a product.

14. Key Terms
Economists use the term _____ to describe agreements among firms to set prices and production levels.

15. Key Terms
Economists use the term collusion to describe agreements among firms to set prices and production levels.

16. Key Terms
Monopolies benefit from _____, where production costs go down with each additional unit produced, and in turn, profits increase.

17. Key Terms
Monopolies benefit from economies of scale, where production costs go down with each additional unit produced, and in turn, profits increase.

18. Key Terms
_____ is an agreement among firms to charge one price for the same good.

19. Key Terms
Price fixing is an agreement among firms to charge one price for the same good.

20. Main Ideas
Compare and contract natural monopolies and government monopolies.

21. Main Ideas
Compare and contract natural monopolies and government monopolies.
Natural monopolies exist in markets where it would be inefficient for more than one producer to exist.
Government monopolies provide franchises, licenses, patents or copyrights for specific purposes.
Both allow monopolies to exist.

22. Main Ideas
What four conditions are necessary for a market to be considered monopolistically competitive?

23. Main Ideas
What four conditions are necessary for a market to be considered monopolistically competitive?
Many firms
Relatively easy market entry (few barriers)
Similar, but differentiated products
Slight control over price
Know the conditions for all four market structures.

24. Monopolistic Competition
Main Ideas
Perfect Competition
Monopoly
Oligopoly
Monopolistic Competition
Number of producers
Many
One
Few/Handful
Variety of goods
Identical (commodity)
Unique good (inelastic)
Some (commodities with some differences usually)
Some (product differentiation)
Market entry
None/few
Impossible
Difficult
Easy
Control over price
None
Complete
Some (incentives to cooperate and cheat)
Some (slight)
Example
Agriculture
Utilities
Oil
Gas Stations

25. Main Ideas
How do monopolies control price?

26. Main Ideas How do monopolies control price?
Monopolies control price by manipulating production.

27. Main Ideas
How do companies conduct non-price competition?

28. Main Ideas How do companies conduct non-price competition?
physical characteristics
location
customer service
advertising

29. Main Ideas
What is required for a firm to conduct a successful price discrimination scheme?

30. Main Ideas
What is required for a firm to conduct a successful price discrimination scheme?
Market power
Distinct groups
Difficult resale