Glossary: Monopoly
- allocative efficiency
- producing the optimal quantity of some output; the quantity where the marginal benefit to society of one more unit just equals the marginal cost
- barriers to entry
- the legal, technological, or market forces that may discourage or prevent potential competitors from entering a market
- copyright
- a form of legal protection to prevent copying, for commercial purposes, original works of authorship, including books and music
- deregulation
- removing government controls over setting prices and quantities in certain industries
- intellectual property
- the body of law including patents, trademarks, copyrights, and trade secret law that protect the right of inventors to produce and sell their inventions
- legal monopoly
- legal prohibitions against competition, such as regulated monopolies and intellectual property protection
- marginal profit
- profit of one more unit of output, computed as marginal revenue minus marginal cost
- monopoly
- a situation in which one firm produces all of the output in a market
- natural monopoly
- economic conditions in the industry, for example, economies of scale or control of a critical resource, that limit effective competition
- patent
- a government rule that gives the inventor the exclusive legal right to make, use, or sell the invention for a limited time
- predatory pricing
- when an existing firm uses sharp but temporary price cuts to discourage new competition
- trade secrets
- methods of production kept secret by the producing firm
- trademark
- an identifying symbol or name for a particular good and can only be used by the firm that registered that trademark
