Lesson 4

3. forms when barriers prevent firms from entering a market that has a single supplier
8. are characteristics that cause a producers average cost drop as production rises
11. is a monopoly created by the government
12. is the ability to control prices and total market output
14. is a business combination similar to a cartel
16. when competitors cut their prices very low to win business
20. is a contract issued by a local authority that gives a single firm the right to sell its goods within an exclusive markets
21. enables monopolistically competitive seller to profit from the differences between his or her products and competitors products
22. gives a company exclusive rights to sell a new good or service for a specific period of time
25. describes a market dominated by a few large, profitable firms
26. competition through ways other than lower prices
27. economists are skeptical about most claims

1. is a market that runs most efficiently when one large firm provides all the output
2. an agreement among members of an oliopolgy to illegally set prices and production levels
4. the expenses that a new business must pay before it can begin to produce and sell goods
5. factors that make it difficult for new firms to enter a market.
6. many companies compete in and open market to sell products similar but not identical
7. granting firms the right to operate a business, especially where resources are involved.
9. is an agreement by a formal organization of producers to coordinate prices and production
10. assumed that the monopolist must charge the same price to all consumers
13. means that the government no longer decides what role each company can play in a market and how much it can charge its customers.
15. a product that is considered the same regardless who makes or sells it
17. occurs when a company joins with another company or companies to form a single firm
18. a market structure that fails to meet the conditions of pure competition
19. the simplest market structure
23. the federal government has a number of policies that keep firms from controlling the price and supply
24. an agreement among firms to sell at the same or very similar prices