Economics: Business Organizations and Market Structures

monopoly

a market structure in which there is a single supplier of a good for service. Also, a firm that is the single supplier of a good or service for which there are no close substitutes

oligopoly

a market strucutre in which a few, relatively large firms account for all or most of the production or sales of a good or service in a particular market, and where barriers to new firms entering the market are very high.

monopolistic competition

a market structure in which slightly differentiated products are sold by a large number of relativel small producers, and in which the barriers to new firms entering the market are low

perfect competition

a market strucutre in which a large number of relatively small firms produce and sell identical products and in which there are no significant barriers to entry into or exit from the industry.

market structure

the degree of competition in a market, ranging from many buyers and sellers to few or even single buyers and sellers

competition

attempts by two or more individuals or organizations to acquire the same goods, services ,or productive and finanicial resources.

markets

places, institutions, or technological arrangments by means of which goods or services are exchanged; also the set of all sale and purchase transactions that affect the price of some good or service

collusion

a secret agreement between firms to fix prices or engage in other activities to restrict competition in an industry; illegal in the United States

natural monopoly

an industry in which the advantages of large-scale production make it possible for a single firm to produce the entire output of the market at a lower average cost than a number of firms each producing a smaller quantity

imperfect competition

any market strucutre in which firms are not price takers, but instead must seek the price and output levels that maximize their profits

barriers to entry

factors that restrict entry into an industry and give cost advantages to existing firms; i.e. resources or patents

price taker

a firm that is unable to set a price that difffers from the market price with losing profit; a firm in a perfectly competitive industry

nonprofit organization

an organization that is exempt from federal (and sometimes state) taxes; receives income from donors, subsidized beneficiaries, and indirectly, taxpayers; and therefore should provide its goods or services free or below cost

dividend

a share of a company's net profits paid to stockholders

stock

an ownership share or shares of ownership in a corporation

corporation

a legal entity owned by shareholders whose liability for the firm's losses is limited to the value of the stock they own

partnership

a business with two or more owners who share the firm's profits and losses

liability

legal responsibility to pay for damages or losses one has caused

sole proprietorship

a business owned by one person who receives all the profits and is responsible for all the debts incurred by the business

cartel

group who practices collusion

cartel example

OPEC is a ____(include word example after answer)

Place, Price, Product, Promotion

4 Ps of marketing (alphabetical order)

franchise

parent companies sell the right of a firm to use their name and products in a given area

franchise example

McDonalds is a____(include word example after answer)

cooperatives

organizations owned by a group of individuals for their shared benefits

cooperative example

Sams is a ____(include word example after answer)

ATT

Company broken up by government anti-trust laws

Microsoft

company not broken up by government anti-trust laws; evaded government break up