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33 Cards in this Set
- Front
- Back
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average fixed cost |
total fixed cost per unit of out put |
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average variable cost |
total variable cost per unit of output |
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average total cost |
total cost per unit of output |
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diseconomies of scale |
exist if when a firm increases its plant size and labor employed by the same percentage, its output increases by a smaller percentage and average total cost increases |
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economic profit |
total revenue - total cost |
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economies of scale |
these exsit if when a firm increases its plant size and labor employed by the same percentage its output increases by a larger percentage and average total cost decreases |
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explicit cost |
cost paid in money |
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implicit cost |
an opportunity cost incurred by a firm when it uses a factor of production for which it does not make a direct money payment |
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increasing marginal returns |
occur when the marginal product of an addional worker exceeds the marginal product of the previous worker |
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law of decreasing returns |
as a firm uses more of a variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decreases |
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long run |
a time frame in which the quantities of all resources can be changed |
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marginal cost |
the change in the total cost that results from a one-unit increase in total product |
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marginal product |
the change in the total product that results from a one-unit increase in the quantity of labor employed |
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short run |
a time frame in which the quantities of some resources are fixed |
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total cost |
the cost of all factors of production the firm uses |
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total fixed cost |
the cost of a firm's fixed factors of production used by a firm(cost of land, captial, and entrepreneurship) |
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total variable cost |
the cost of the variable factor of production used by a firm(cost of labor |
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marginal revenue |
the change in total revenue that results from a one-unit increase in quantity sold |
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monopolistic competition |
a market in which a large number of firms compete by making similar but slightly different products |
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monopoly |
a market in which one firms sells a good or service that has no close substtitutes and barrier blocks the entry to new firms |
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oligopoly |
a market in which a small number of independent firms compete |
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perfect competition |
a market n which there are many firms, each selling an identical product; many buyers; no barriers to entry of new firms into the industry; no advantage to established firms; and buyers and sellers are well informed about prices |
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price taker |
a firm that cannot influence the price of a good or service that it produces |
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monopoly |
a market in which one firm sells a good or service tht has no close substitutes and a barrier blocks the entry of new firms |
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barriers to entry |
any constraint that protects a firm from competitors |
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natural monopoly |
a monopoly that arises because one firm can meet the entire market demand at a lower average total cost than two or more firms could |
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legal monopoly |
a market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copy right |
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cartel |
a group of firms acting together to limit output, raise price, and increase economic profit |
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duopoly |
a market with only two firms |
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herfindahl-hirschman index |
the square of the percentage market share of each firm summed over the 50 largest firms in a market |
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nash equilibrium |
a equilibrium in which each player takes the best possible action given the action of the other player |
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shutdown point |
price equals minimum variable cost and quantity produced is that at which average variable cost is at its minimum |
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barriers to entry |
natural, ownership, and legal |
