microeconomics final tomorrow

A price cap is a ceiling above which regulators do not permit prices to rise. The cap is designed to provide an efficiency incentive to the firm my allowing it to keep part of any savings in costs it can achieve.

Cross-subsidization means selling one product of the firm at a loss, which is balanced by higher profits on another of the firm's products.

Antitrust policy refers to programs and laws that preclude the deliberate creation of monopoly ad prevent powerful firms from engaging in related "anticompetitive practices."

Monopoly power (or market power) is the ability of a business firm to earn high profits by raising the prices of is products above competitive levels and to keep those prices high for a substantial amount of time.

Input-output analysis is a mathematical procedure that takes account of the interdependence among the economy's industries and determines the amount of output each industry must provide as inputs to the other industries in the economy.

An activity is said to generate a beneficial or detrimental externality if that activity causes incidental benefits or damages to others not directly involved in the activiy and no corresponding compensastion is provided to or paid by those who generate the externality.

Public goods cannot be financed by private enterprise, or at least not at socially desirable prices.