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Free market (Benefits (Profit motive, Consumer sovereignty,…

- - - - A market where one firm takes up over 25% of the market share. Allows them to become 'price makers'
        
        Price maker: When a firm is able to dictate the price of goods in a market without significant change in demand.
        
        Monopolies create high barriers to entry into the market, as the size of the monopoly often allows them to keep demand inelastic and achieve economies of scale
    - - A good which has a larger social cost than private cost
        
        Social cost: Total cost towards society, private cost + negative externality
        
        Private cost: The negative effects the direct consumption of a good has on the individuals involved in the transaction
    - - A good which has a larger social benefit than private benefit
        
        Social benefit: Total benefit towards society, private benefit + positive externality
        
        Private benefit: The benefits from directly consuming a good to the individuals involved in the transaction
    - - A good that is non-rivalrous and non-excludable. Not provided by the free market.
        
        Non-rivalrous: When consumption of a good does not prevent the simultaneous consumption of the same good eg. streetlight
        
        Non-excludable: Can't stop people from using it for free, impossible to separate from free riders.
    - - A negative externality of free market is that production is simply done for profit, without taking environmental factors into account