Chapter 7 Market Structure Vocab

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

Commodity: A product that is the same no matter who produces it, such as petroleum, notebook paper, or milk.

Barrier to Entry: Any factor that makes it difficult for a new firm to enter a market.

Imperfect Competition: A market structure that does not meet the conditions of perfect competition.

Start-Up Costs: The expenses a firm must pay before it can begin to produce and sell goods.

Monopoly: A market dominated by a single seller.

Economies of Scale: Factors that cause producer’s average cost per unit to fall as output rises.

Natural Monopoly: A market that runs more efficiently when one large firm supplies all of the output.