Term
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Definition
| a monopoly that is protected by legal restrictions on competition |
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Term
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Definition
| an industry in which long-run average cost is minimized when only one firm serves the market |
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Term
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Definition
| a monopoly in which one firm is, at least for a time, the sole supplier of a product but has no special protection from competition |
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Term
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Definition
| any firm that faces a negatively sloped demand curve for its product |
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Term
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Definition
| a monopoly that offers its output at a single price that is uniform for all customers and allows all buyers to purchase as much or as little as they want at that price |
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Term
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Definition
| a strategy in which the dominant firm in a market charges less than the short-run profit maximizing price in order to limit the likelihood of entry by new competitors |
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Term
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Definition
| the practice of charging different prices for various units of a single product when the prices differences are not justified by differences in cost |
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Term
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Definition
| a pricing strategy in which people must pay for the right to become a buyer before choosing how much to buy at a given price |
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Term
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Definition
| the part of a two-part pricing strategy paid for the right to become a customer |
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Term
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Definition
| the per-unit price offered in a two-part pricing strategy to qualified customers who have paid the access charge |
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Term
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Definition
| a loss of consumer of producer surplus that is not balanced by a gain to someone else |
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Term
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Definition
| the degree to which the economy as a whole is dominated by the largest firms |
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Term
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Definition
| the degree to which a market is dominated by a few large firms |
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Term
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Definition
| the percentage of all sales that is accounted for by the four or eight largest firms in a market |
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Term
| Herfindahl-Hirschmann Index (HHI) |
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Definition
| an index of market concentration that is calculated by squaring the percentage market shares of all firms in an industry then summing the squared-values |
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Term
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Definition
| any circumstance that prevents a new firm in a market from competing on an equal footing with existing ones |
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Term
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Definition
| a market in which barriers to entry and exit are low |
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Term
| Oligopolistic Interdependence |
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Definition
| the need to pay close attention to the actions of rival firms in an oligopolistic market when making price or production decision |
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Term
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Definition
| a group of producers that jointly maximize profits by fixing prices and limiting output |
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Term
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Definition
| a situation in which price increases or decreases by a dominant firm in an oligopoly, known as the price leader, are matched by all or most of the other firms in the market |
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Term
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Definition
| demand for a productive input that stems from the demand for the product the input is used to produce |
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Term
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Definition
| the change in revenue that results from the sale of the output produced by one additional unit of an input |
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Term
| Value of Marginal Product |
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Definition
| marginal physical product times the product's per-unit price |
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Term
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Definition
| the amount by which a firm's total resource cost must increase for the firm to obtain an additional unit of that resource |
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Term
| Marginal Productivity Theory of Distribution |
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Definition
| a theory of income distribution in which each input of production receives a payment equal to its marginal revenue product |
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Term
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Definition
| a situation in which there is only a single buyer in a market; more generally, any situation in which a firm is a price searcher in a market in which it is a buyer |
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Term
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Definition
| capital in the form of learned abilities that have been acquired through formal training or education or through on-the-job experience |
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Term
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Definition
| the theory that wages above the minimum necessary to attract qualified workers can raise productivity by enough to increase profit |
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Term
| Rate of Return on Capital |
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Definition
| the marginal product of capital expressed as an annual percentage rate |
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Term
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Definition
| the tendency to prefer goods now to goods in the future, other things being equal |
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Term
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Definition
| a general term for the set of markets in which people borrow and lend, for whatever reason |
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Term
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Definition
| the income earned by any resource whose supply is perfectly inelastic with respect to its price |
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Term
| Capitalized Value of a Rent |
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Definition
| the present value of all future rents that a piece of land or other resource is expected to earn |
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Term
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Definition
| the rents earned by superior units of a resource in a situation in which units of a resource differ in productivity |
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Term
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Definition
| the difference between the payment made to a unit of resource and the minimum required for that resource to be willingly supplied in a situation in which units of a resource differ in terms of the willingness with which they are supplied |
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Term
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Definition
| The change in total revenue resulting from a 1-unit change in sales |
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Term
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Definition
| usually the largest firm in an industry; a firm which controls a significant percentage of an industry;s supply and essentially determines the market price and output for its competitive fringe |
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