Antitrust policy aims to regulate and prevent anticompetitive pricing
Barriers to entry provide a seller with protection from potential competitors entering the market
Collusion occurs when firms conspire to set the quantity they produce or the prices they charge
A copyright is an exclusive right granted by the government to the creator of a literary or artistic work
Deadweight loss is the decrease in social surplus from a market distortion
Differentiated products refer to goods that are similar but are not perfect substitutes
Duopoly refers to a two-firm industry
Equity is concerned with the distribution of resources across society
An efficient or socially optimal price is set at marginal cost
Homogeneous products refer to goods that are identical and so are perfect substitutes
A firm has legal market power when it obtains market power through barriers to entry created not by the firm itself but by the government
Market power relates to the ability of sellers to affect prices
Monopolistic competition is the market structure that applies when there are many competing firms and products are differentiated
A monopoly is an industry structure in which only one seller provides a good or service that has no close substitutes
Natural market power occurs when a firm obtains market power through barriers to entry created by the firm itself
A natural monopoly is a market in which a firm can provide a good or service at a lower cost than can two or more firms
Network externalities occur when a product’s value increase as more consumers begin to use it
Oligopoly is the market structure that applies when there are few firms competing
An outcome is Pareto efficient if no individual can be made better off without making someone else worse off
A patent is the privilege granted to an individual or company by the government, which gives him or her the sole right to produce and sell a good
A price control is a government restriction on the price of a good or service
Price makers are sellers that set the price of a good
Research and Development (R&D) is the investment by firms in the creation of products not yet available on the market
The residual demand curve is the demand that is not met by other firms and depends on the prices of all firms in the industry
Social Surplus is the sum of consumer surplus and producer surplus