Term
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Definition
| how much a percentage change in price leads to a percentage change in quantity demanded or quantity supplied |
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Term
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Definition
| the percentage change in quantity demanded divided by the percentage change in price |
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Definition
| the percentage change in quantity supplied divided by the percentage change in price |
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Definition
| the elasticity calculated form the appropriate formula has an absolute value greater than one |
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Definition
| the extremely elastic situation where quantity changes by an infinit amount in response to any change in price |
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Definition
| the elasticity calculated from the appropriate formula has an absolute value less than one |
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Definition
| the highly inelastic case in which a percentage change in price, no matter how large, results in zero change in the quantity |
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Definition
| a good where the quantity demanded rises when income rises |
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Definition
| a good wher ethe quantity demanded declines as income increasese |
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Term
| cross-price elasticity of demand |
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Definition
| the percentage change in the quantity of good A that is demanded as a result of a percentage change i good B. |
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| elasticity of labor supply |
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Definition
| the percentage change in thours worked divided by the percentage change in wages. |
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Definition
| the percentage change in the quantity of savings divided by the percentage change in interest rates |
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Term
| price elasticity of demand |
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Definition
| same as elasticity of demand |
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Term
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Definition
| each firm facesa many competitors that sell identical products |
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Term
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Definition
| a firm that faces no competitors |
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Term
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Definition
| where many firms sell similar but differentiated products. |
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Term
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Definition
| a small number of firms sell a similar product but face no other ocmpetition |
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Term
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Definition
| expenditures that must be made before production starts and that do not change regardless of the level of production. |
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Term
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Definition
| costs of production that increase with the quantity produced |
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Term
| diminishing marginal returens |
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Definition
| when the marginal gain in output diminshes as each additional unit of input is added |
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Term
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Definition
| total cost divided by the quantity of output |
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Term
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Definition
| variable cost divided by the quantity of output |
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Term
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Definition
| the addtiional cost of producing one more unit |
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Term
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Definition
| alternative methods of combind inputs to produce output. |
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Term
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Definition
| as the quantity of putput rises, the average cost of production falls |
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Term
| increasing returns to scale |
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Definition
| when a larger-cale firm can produce at a lower cost than asmaller-cscale firm, also called economies of scale |
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Term
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Definition
| when expaniding all inputs does not change the average cost of produciton. |
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Term
| diseconomies of scale/decreasing returns to scale |
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Definition
| as the quantity of output rises, the average cost of production rises. |
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Term
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Definition
| each firm faces many competitors that sell identical products |
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Term
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Definition
| a firm in a perfectly competitive market that must take the prevailing market price as given |
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Term
| profit=total revenue-total cost |
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Definition
| price*Qsupplied-avg cost* quantity supplied |
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Term
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Definition
| the additional revenue gained from selling one more unit |
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Term
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Definition
| total revenue divided by quantity |
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Term
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Definition
| marginal change total cost/marginal change avg. quantity |
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Term
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Definition
| when the revenue a firm recieves does not cover its average variable costs, the firm should shut down immediately; the point where the marginal cost curve crosses the aveage variable cost curve |
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Term
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Definition
| the long-run process of firms beginning and expanding production in response to a sustrained apttern of profits |
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Definition
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Definition
| legal, technical or market forces that may discourage others to enter |
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Definition
| a government rule that gives the inventor rights for a given time |
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Definition
| a word name or symbol that indicates that goods are registerd for a certain firm |
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Definition
| the body of law including patents, trademarks copyrights and trade secret law that protect the right of inventros t oproduce and sell their inventions |
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Term
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Definition
| when an existing firm uses sharp but temporary price cuts to discourage new comp. |
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Definition
| when firms act together to reduce output and keep prices high |
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| a group of firms that collude toproduce the monopoly output and sell at the monopoly price |
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Term
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Definition
| players msut make decisions and then recieve payoffs |
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Definition
| a game in which the gains from cooperation are alrger than the rewards from pursuing self-interest |
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Term
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Definition
| a perceived demand curve that arises when competing oligopoly firms commit to match price cuts, but not price increases |
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