Term
|
Definition
| firms are price takers, easy entry/exit, many buyers/sellers, homogeneous product, perfect knowledge |
|
|
Term
|
Definition
|
|
Term
| Why do we study perfect competition when there is no real world example of this type of market structure? |
|
Definition
| We study it to show why the move towards competition is desirable |
|
|
Term
| positive economic profits |
|
Definition
| entry, capital moves towards the activity |
|
|
Term
| negative economic profits |
|
Definition
| capital moves away from the economic activity |
|
|
Term
|
Definition
| no change, capital is no different |
|
|
Term
| where will a firm produce on the MR and MC curves |
|
Definition
|
|
Term
| What is the rule use to determine where a firm will produce? |
|
Definition
| • Profit is maximized when the additional revenue from producing and selling an additional unit of output equals the additional cost |
|
|
Term
| what is the formula for TR |
|
Definition
|
|
Term
| what is the formula for TC |
|
Definition
|
|
Term
| what is the formula for TFC |
|
Definition
|
|
Term
| what is the formula for profits |
|
Definition
|
|
Term
|
Definition
| as the size of a firm increase its per-unit cost declines. o If economies of scale exist, a larger firm can produce a product at a lower per-unit cost than can a smaller firm |
|
|
Term
|
Definition
| Brand names and reputation, Guarantees and warranties |
|
|
Term
| Internal strategic assets |
|
Definition
| Anything that gives a firm an advantage and is not easily imitated serves as a strategic asset Ex: patents, licenses, brand names |
|
|
Term
| Why did the antitrust laws come about? |
|
Definition
| o Came about to control growth of monopolies and prevent firms from engaging in undesirable practices (or minimize monopoly power) |
|
|
Term
| two categories of government regulation |
|
Definition
|
|
Term
|
Definition
| • Refers to the prescribing of prices and output levels for a particular industry or line of business |
|
|
