Term
| Perfectly Competitive Market |
|
Definition
|
A market that meets the conditions of (1) many buyers and sellers,(2) all firms selling identical products, and (3) no barriers to new firms entering the market.
|
|
|
Term
|
Definition
|
A buyer or seller that is unable to affect the market price.
|
|
|
Term
|
Definition
|
Total Revenue divided by the quantity of the product sold.
|
|
|
Term
|
Definition
|
Change in total revenue from selling one more unit of a product.
|
|
|
Term
|
Definition
|
The point at which the difference between TR and TC is the greatest.
|
|
|
Term
|
Definition
|
A cost that has already been paid and that cannot be removed.
|
|
|
Term
|
Definition
|
The minimum point on a firm's average variable cost curve; if the price falls below this point, the firm shuts down production in the short run.
|
|
|
Term
|
Definition
|
A firm's revenues minus all its cost, implicit and explicit.
|
|
|
Term
|
Definition
|
The situation in which a firm's total revenue is less than its total cost, including all implicit costs.
|
|
|
Term
| Long-run Competitive Equilibrium |
|
Definition
|
The situation in which the entry and exit of firms has resulted in the typical firm breaking even.
|
|
|
Term
|
Definition
|
A curve that shows the relationship in the long run between market price and quantity supplied.
|
|
|
Term
| Increasing-cost Industries |
|
Definition
|
Industries with an upward sloping long-run supply curve.
|
|
|
Term
| Decreasing-cost Industries |
|
Definition
|
Industries with downward sloping supply curves.
|
|
|
Term
|
Definition
|
The situation in which a good or service is produced at the lowest possible cost.
|
|
|
Term
|
Definition
|
A State of the economy in which production represents consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it.
|
|
|
