Term
|
Definition
| A _______ is a market with a single firm that produces a good or service with no close substitutes and that is protected by a barrier that prevents other firms from entering that market. |
|
|
Term
|
Definition
| A constraint that protects a firm from potential competitors is called a _________. |
|
|
Term
|
Definition
| A natural barrier to entry creates a ________ : a market in which economies of scale enable one firm to supply the entire market at the lowest possible cost. |
|
|
Term
|
Definition
| A legal barrier to entry creates a _________: a market in which competition and entry are restricted by the granting of a public franchise, government licence, patent, or copyright. |
|
|
Term
| ownership barrier to entry |
|
Definition
| An ___________ occurs if one firm owns a significant portion of a key resource. |
|
|
Term
|
Definition
| A ___________ is a firm that must sell each unit of its output for the same price to all its customers. |
|
|
Term
|
Definition
| When a firm practises ________, it sells different units of a good or service for different prices. |
|
|
Term
|
Definition
| Any surplus—consumer surplus, producer surplus, or economic profit—is called _________. |
|
|
Term
|
Definition
| The pursuit of wealth by capturing economic rent is called ____________. |
|
|
Term
| perfect price discrimination |
|
Definition
| The more consumer surplus a firm is able to capture, the closer it gets to the extreme case called _____________ , which occurs if a firm can sell each unit of output for the highest price someone is willing to pay for it. |
|
|
Term
|
Definition
| __________ —rules administered by a government agency to influence prices, quantities, entry, and other aspects of economic activity in a firm or industry—is a possible solution to this dilemma. |
|
|
Term
|
Definition
| __________ is the process of removing regulation of prices, quantities, entry, and other aspects of economic activity in a firm or industry. |
|
|
Term
|
Definition
| The __________ is that the political and regulatory process relentlessly seeks out inefficiency and introduces regulation that eliminates deadweight loss and allocates resources efficiently. |
|
|
Term
|
Definition
| The _________ is that regulation serves the self-interest of the producer, who captures the regulator and maximizes economic profit. |
|
|
Term
| marginal cost pricing rule |
|
Definition
| The answer is by being regulated to set its price equal to marginal cost, known as the ____________. |
|
|
Term
| average cost pricing rule |
|
Definition
| The __________ sets price equal to average total cost. |
|
|
Term
| rate of return regulation |
|
Definition
| Under _________, a firm must justify its price by showing that its return on capital doesn’t exceed a specified target rate. |
|
|
Term
|
Definition
| A _______ is a price ceiling—a rule that specifies the highest price the firm is permitted to set. |
|
|
