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11 Cards in this Set
- Front
- Back
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___= a group of firms producing a similar product
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industry
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___= a model of firms in an industry in which free entry and exit produce an equilibrium such that price equals the minimum average total cost
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long-run competetive equilibrium model
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___- mvt of firms into and out of an industry that is not blocked by regulation, other firms, or any other barriers
-decision to enter industry or exit industry is based on profits ( P= TR - TC) -if profits positive, incentive to enter -if profits negative, incentive to exit the industry -when profit equals zero, there is no incentive to do either one |
free entry and exit
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__= a situation in which entry into and exit from an industry are complete and economic profits are zero, with price (P) = to average total cost (ATC)
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long-run equilibrium
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___= total revenue minus total cost ( TR - TC), where TC exclude the implicit opportunity costs; this is the definition of profits usually reported by firms
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accounting profits
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___= total revenue minus total costs (TR-TC), where TC include opportunity costs, whether implicit or explicit
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economic profits
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__= the amt of accounting profits when economic profits are equal to zero
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normal profits
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__= a curve traced out by the intersections of demand curves shifting to the right and corresponding short-run supply curves
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long-run industry supply curve
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__= a situation in whch growth in an industry causes ATC for the individual firm to rise bc of some factor external to the firm; corresponds to an upward-sloping long-run industry curve
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external diseconomies of scale
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__= situation in which growth in an industry causes ATC for the individual firm to fall bc of some factor external to the firm; corresponds to a downward- sloping long-run industry supply curve
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external economies of scale
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internal economies or diseconomies of scale occur when a __ __ expands.
External economies or diseconomies of scale occur when an __ expands |
single firm
industry |
