Micro Ch_9 Vocab Flashcards Monopoly

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Allocative efficiency

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Producing the optimal quantity of output where the marginal benefit to society of one more unit equals the marginal cost.

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Barriers to entry

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Legal, technological, or market forces that discourage or prevent potential competitors from entering a market.

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Copyright

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A form of legal protection to prevent copying of original works of authorship, including books and music, for commercial purposes.

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Deregulation

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Removing government controls over setting prices and quantities in certain industries.

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Intellectual property

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The body of law including patents, trademarks, copyrights, and trade secret law that protect the rights of inventors to produce and sell their inventions.

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Legal monopoly

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Legal prohibitions against competition, such as regulated monopolies and intellectual property protection.

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Marginal profit

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Profit of one more unit of output, computed as marginal revenue minus marginal cost.

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Monopoly

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A situation in which one firm produces all of the output in a market.

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Natural monopoly

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Where economic conditions in the industry, like economies of scale or control of a critical resource, limit effective competition.

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Patent

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A government rule that gives the inventor the exclusive legal right to make, use, or sell the invention for a limited time.