Glossary Terms:

The Economics of Professional Sports: Underpaid Millionaires?

Glossary terms from:


A secret agreement between firms to fix prices or engage in other activities to restrict competition in an industry; illegal in the United States.


Attempts by two or more individuals or organizations to acquire the same goods, services, or productive and financial resources. Consumers compete with other consumers for goods and services. Producers compete with other producers for sales to consumers.


The study of how people, firms and societies choose to allocate scarce resources with alternative uses.

Factor Prices

The prices of land, capital, labor and entrepreneurship.


Places, institutions or technological arrangements where or by means of which goods or services are exchanged. Also, the set of all sale and purchase transactions that affect the price of some good or service.


Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.


A market situation in which there is only one buyer of a resource. Also, a firm that is the only buyer of a resource; also known as a monopsonist.

Perfect Competition

A market structure in which a large number of relatively small firms produce and sell identical products and in which there are no significant barriers to entry into or exit from the industry. Firms in perfect competition are price takers and in the long run will earn only normal profits.


The money a business receives from customers who buy its goods and services. Not to be confused with profit.


Payments for labor resources; unlike wages, not explicitly based on the number of hours worked. See also Wages.


A regular payment, often at monthly or biweekly intervals, made by an employer to an employee, especially in the case of professional or white-collar employees. Salaries are paid for services rendered and are not based on hours worked.


A good or service that may be used in place of another good or service; examples include tap water for bottled water (or vice versa) and movies for concerts (or vice versa).