Cartel: When firms agree to act or collude together instead of competing with each other other – includes both price fixing and market sharing
Collusion: General term describing agreements between firms – either price or market sharing – to reduce competition and increase profits
Market Sharing: A market is divided into a series of smaller markets, each supplied by one of the firms, thus reducing competition
Collusive Tendering: Firms agree to submit exorbitant tenders which ensure high profits and the sharing of work between the collusive members
Predatory Pricing: When a company with substantial market power sets is prices at a sufficiently low level with the purpose of eliminating or substantially damaging a competitor
Resale Price Maintenance: The supplier sets the price at which a retailer must sell its products. The manufacturer may refuse to sell to any retailer which may resell their products at a discount
Exclusive Dealing: When one person trading with another imposes some restrictions on the other’s freedom to choose which whom or where they deal
Collective Boycott: When a group of competitors agree not to acquire goods or services from, or not to supply goods or services to, a business with whom the group is negotiating
Merger: Two or more firms join together to form one larger firm - prohibited if it substantially reduces competition in the market
If there is a natural monopoly, it is not in society’s interest to break it up into smaller firms, as this would result in higher average costs and would be inefficient
Governments usually regulate natural monopolies, to ensure more socially desirable price and quantity outcomes