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12 Cards in this Set
- Front
- Back
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Competitive Market |
There are many buyers and sellers in the world, and the goods offered by various sellers are largely the same |
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Average Revenue |
Total Revenue / The amount of output |
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Marginal Revenue |
The change in total revenue from the sale of each additional unit of output |
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Sunk Cost |
When it has already been committed and cannot be recovered |
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A competitive firm's short-run supply curve is its _________ cost curve above its _________ cost curve. |
Marginal, Average Variable |
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If a profit-maximizing, competitive firm is producing a quantity at which marginal cost is between average variable cost and average total cost, it will... |
Keep producing in the short run but exit the market in the long run |
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A perfectly competitive firm... |
Takes it price as given by market conditions |
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A competitive firm maximizes profit by choosing the quantity at which... |
Marginal cost = price |
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A firm shuts down when: |
- Tax Revenue < Variable Cost - Tax Revenue / Quantity < Variable Cost / Quantity - Price < Average Variable Cost |
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A firm exits when: |
- Tax Revenue < Total Cost - Tax Revenue / Quantity < Total Cost / Quantity - Price < Average Total Cost |
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A firm enters when: |
Price > Average Total Cost |
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In a competitive firms long-run, the supply curve is its ___________ above ___________ |
Marginal Cost Curve (MC), Average Total Cost (ATC) |
