adverse selection  the situation that occurs when higher-quality consumers or producers are driven out of the market because unobservable qualities are misvalued
antitrust policy  government policies and programs designed to control the growth of monopoly and enhance competition
capture theory  government actions benefit some special-interest group that has captured control of regulations, legislation, or governing authority
concentration  the degree to which a few firms control the output and pricing decisions in a market
contracting out  hiring a private firm to provide a product or service for a government entity
economic regulation  the prescription of price and output for a specific industry
fair rate of return  a price that allows a monopoly firm to earn a normal profit
Herfindahl index  a measure of concentration calculated as the sum of the squares of the market share of each firm in an industry
moral hazard  the chance that people will alter their behavior in unanticipated ways after an agreement or contract has been defined
per se rule  actions that could be anticompetitive are intrinsically illegal
privatization  transferring a publicly owned enterprise to private ownership
public interest theory  the theory that government should intervene in business actions to improve the well-being of the general public
rent seeking  the use of resources simply to transfer wealth from one group to another without increasing production or total wealth
rule of reason  the rule that to be illegal, an action must be unreasonable in a competitive sense and the anticompetitive effects must be demonstrated
social regulation  the prescribing of health, safety, performance, and environmental standards that apply across several industries