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15 Cards in this Set
- Front
- Back
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Breakeven point |
The state when a firm’s total revenue just equals its total cost |
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Economic Profits |
The difference between the net income of the firm and the oppurtunity cost of the inputs used; also known as economic value added |
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Long run |
A sufficiently long period of time wherein a firm can complete all desired input adjustments; new firms can enter the market and existing firms can depart |
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Long-run equilibrium |
- the condition when the firm has neither incentive nor oppurtunity to change what it is doing; it is when there is no more economic profits to be had nor any losses to be incurred |
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Marginal cost |
The additional cost incurred when additional units of output are produced. |
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Marginal Revenue |
The additional revenue obtained by putting the additional units of output in the market |
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Profits |
Pure surplus or an excess of total receipts over all costs of production incurred by a firm |
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Pure competition |
A market wherein there is a large number of buyers and sellers of a commodity, each too small to affect price, where outputs of all firms in the market are homogenous, and where there is perfect mobility |
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Short run |
A time period in which a firm can vary its output but does not have tome to change its plant size and the number of firms in an industry is fixed because new firms do not have time to leave. |
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Shutdown Price |
The price that would force the producer to stop production because of losses; it is when the market price is less than the minimum average variable costs. |
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Less than most efficient size of Plant |
The condition when The monopolist's market is so limited that the marginal revenue curve cuts the long-run average cost curve to the left of it's minimum point. |
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Most efficient size of plant |
The condition when the monopolist's cost curves are such that the marginal revenue curve hits the minimum point of long run average cost curve. |
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Price Discrimination |
Happens when a monopolist separates two markets and charges different prices for the product in each of the markets. |
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Profit |
Pure surplus or an excess of total receipts over all costs of production incurred by the firm (revenue minus cost) |
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Pure Monopoly |
A market organization in which there is single firm producing a commodity or a service for which there are no close substitutes. |
