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Definition
| Model of the market based on the assumption that a large number of firms produce identical goods consumed by a large number of buyers. |
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| Individuals or firms who must take the market price as given. |
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| A firm's output multiplied by the price at which it sells that output. |
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| The increase in total revenue from a 1-unit increase in quantity. |
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Definition
| Total revenue divided by quantity. |
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Definition
| Difference between price and average total cost. |
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| The amount by which its total cost exceeds its total revenue. |
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Definition
| The minimum level of average variable cost, which occurs at the intersection of the marginal cost curve and the average variable cost curve. |
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Definition
| Charges that must be paid for factors of production such as labor and capital. |
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Definition
| Profit computed using only explicit costs. |
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| A cost that is included in the economic concept of opportunity cost, but that is not an explicit cost. |
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Definition
| Industry in which expansion does not affect the prices of factors of production. |
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Definition
| Industry in which the entry of new firms bids up the prices of factors of production and thus increases production costs. |
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Definition
| Industry in which production costs fall as firms enter in the long run. |
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Term
| Long-Run Industry Supply Curve |
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Definition
| A curve that relates the price of a good or service to the quantity produced after all long-run adjustments to a price change have been completed. |
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