Term
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Definition
| A firm whose primary goal is to maximize the difference between it's total revenues and total costs |
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Term
| Perfectly competitive market |
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Definition
| A market in which no individual supplier has significant influence on the market price of the product |
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Term
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Definition
| A firm that has no influence over the price at which it sells it's product |
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Term
| Imperfectly competitive firm |
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Definition
| A firm that has at least some control over the market price of it's product |
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Term
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Definition
| An input used in the production of a good or service |
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Term
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Definition
| A period of time sufficiently short that at least some of the firm's factors of production are fixed. |
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Term
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Definition
| A period of time of sufficient length that all the firm's factors of production are variable |
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Term
| Law of diminishing returns |
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Definition
| A property of the relationship between the amount of a good or service produced and the amount of a variable factor required to produce it; it says that when some factors of production are fixed, increased production of the good eventually requires ever-larger increases in the variable factor |
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Term
| Fixed factor of production |
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Definition
| An input whose quantity cannot be altered in the short run |
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Term
| Variable factor of production |
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Definition
| An input whose quantity can be altered in the short run |
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Term
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Definition
| The sum of all payments made to the firm's fixed factors of production |
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Term
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Definition
| The sum of all payments made to the firm's variable factors of production |
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Term
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Definition
| The sum of all payments made to the firm's fixed and variable factors of production |
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Term
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Definition
| As output changes from one level to another, the change in total cost divided by the corresponding change in output |
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Term
| Average variable cost (AVC) |
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Definition
| Variable cost divided by total output |
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Term
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Definition
| Total cost divided by total output |
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Term
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Definition
| A firm whose total revenue exceeds it's total cost |
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Term
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Definition
| The amount by which price exceeds the seller's reservation price |
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