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18 Cards in this Set
- Front
- Back
Pure competition
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involves a very large number of firms producing a standarized product. New firms can enter or exit the industry very easily
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Pure monopoly
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a market structure in which one firm is the sole seller of a product or service. Since the entry of additional firms is blocked, one firm constitutes the entire industry. Because the monopolist produces a unique product, it makes no effort to differentiate its product
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Monopolistic competition
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characterized by a relatiely large number of sellers producing differentiated products.
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Nonprice competition
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a selling strategy in which one firm tries to distinguish its product or service from all competing products on the basis of attributes like design and workmanship
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Oligopoly
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involves only a few sellers of a standardization or differentiated productl each firm is affected by the decisions of its rivals, and must take those decisions into account in determining its own price and output
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Price taker
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a competitive firm is a ______________: it cannot change market price; it can only adjust to it.
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Average revenue
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the revenue per unit
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Total revenue
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when you multiply the price by the corresponding quantity the firm can sell
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marginal revenue
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the change in total revneue that results from selling one more unit of output
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Break even point
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an output at which a firm makes aformal profit but not an economic profit
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the MR=MC Rule
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the Profit Maximizing Guide: MR = Marginal Revenue/MC = Marginal Cost. They are only equal at a fractional level of output
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Short-Run Supply Curve
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the soli segment of the marginal-cost curve, MC. The amount of output the firm will supply at ecah price in a series of prices
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Long-Run Supply Curve
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changes in the number of firms in the industry will have on costs of the individual firms in the industry
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Constant-cost industry
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industry expansion of contraction will not affect resource prices and therefore production costs
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Increasing-cost industries
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firms ATC curves shift upward as the industry expands and downwards as the industry contracts
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Productive efficiency
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requires that goods be produced in the least costly way; P= Minimum ATC
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Consumer Surplus
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the difference between the maximum prices that consumers are willing to pay for a product and th market price of that product
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Producer Surplus
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the difference between the minimum prices that producers are willing to acept for a product and the market price of the product
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