Competitive and concentrated markets

• Collusion: Illegal cooperation between multiple firms, forming a cartel..
• Artificial barrier to entry: Barriers to market entry that are man-made, i.e., non-natural.
• Concentrated market: A market with very few (in its most extreme cases, 1) firms.
• Concentration ratio: The total market share of the leading firms in an industry; these firms' output as a percentage of total output.
• Entry barrier: Make it impossible/more difficult for firms to enter a market.
• Exit barrier: Make it impossible/more difficult for firms to exit a market.
• Imperfect competition: Any market structure between the extremes of perfect competition and a pure monopoly.
• Invention: Creation of a new product or process.
• Innovation: Improving upon an existing product or process.
• Limit pricing: Lowering the price of a good or service to around average cost, creating an artificial barrier to entry.
• Market share maximisation: When a firm maximises their percentage share of the market in which it sells its product.
• Market structure: The characteristics of a market.
• Pure monopoly: Only one firm in a market.
• Oligopoly: Market dominated by a few firms.
• Price competition: Reducing the price of a product, thus stripping demand from competitors.
• Patent: Government legislation protecting a firm's right to be the sole producer of a good.
• Sales maximisation: When sales revenue is at its highest.
• Price maker: A firm with monopoly power; the ability to set prices.
• Price taker: A firm that passively accepts the market price, set by forces beyond the firm's control.
• Product differentiation: Differences between multiple similar goods and services.
• Profit maximisation: Occurs where the positive difference between total revenue and total costs is at its highest.