Question: perfect competition

Answer: A market structure in which a large number of firms all produce the same product

Question: how does perfect competition ensure that prices aren’t determined by individual suppliers or consumers?

Answer: Perfect competition forces the price of a good to stay low. When multiple firms are selling the same good, one firm cannot raise their price too high because they could lose business.

Question: which barrier to entry can be overcome by education or vocational training?

Answer: licensing

Question: What are three characteristics of a monopoly?

Answer: exclusive goods, generally high prices, high barriers to entry

Question: how can technology affect a monopoly?

Answer: Innovations that lowers unit costs increases supply. It can allow higher profit at the same price.

Question: how is monopolistic competition different from perfect competition?

Answer: different from pure competition because products are differentiated where as in perfect competition, products are commodity

Question: what is differentiation?

Answer: A business strategy of providing a product or service that is perceived as unique by customers.

Question: what is oligopoly?

Answer: a market in which control over the supply of a commodity is in the hands of a small number of producers and each one can influence prices and affect competitors

Question: define barriers to entry

Answer: Conditions that keep new businesses either from entering an industry or succeeding in that industry.

Question: what is collusion?

Answer: a secret agreement between parties to set prices at illegal rates