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54 Cards in this Set
- Front
- Back
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accounting profit
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A business revenue minus the explicit costs and depreciation
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average fixed cost
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The fixed cost per unit of output
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average total cost
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Total cost dived by quantity of output produced also referred to as average cost
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average variable cost
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The variable cost per unit of output
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barriers to entry
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Something that prevents other firms from entering an industry
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concentration ratios
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Measure the percentage of industry scales accounted for by the X largest firm
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constant returns to scale
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Long run average total cost is constant as output increases
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copyright
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The exclusive legal right of the creator of a literary work to profit from that work, like a patent
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decreasing returns to scale
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Long run average total cost increases as output increases
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diminishing returns to an input
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The effect observed when an increase in the quantity of input while holding else fixed leads to a decline in the marginal product of that input
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diseconomies of scale
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Long run average total cost increases as output increases
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economic profit
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A business revenue minus the opportunity cost of resources usually less then accounting profit
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economies of scale
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Long run average total cost declines as output increases
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explicit cost
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A cost that requires actually laying out money
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fixed cost
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A cost that depends on the cost of the fixed input
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fixed input
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An input whose quantity is fixed for a period of time and cannot be varied
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free entry and exit
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Describes an industry that potential producers could easily enter or current producers could can leave
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implicit cost
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A cost that does not require the outlay of money
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increasing returns to scale
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Long run average total cost declines as output increases
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long-run
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The time period in which all inputs can be varied
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marginal cost curve
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The graphical representation showing how the cost of producing one more unit depends on the quantity that has already been produced
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marginal product
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The additional quantity of output produced by using one more unit of that input
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marginal revenue
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The change in total revenue generated by an additional unit of output
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market share
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The fraction of the total industry output accounted for by a firms output
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minimum-cost output
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The quantity of output at which average total cost is lowest
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monopolistic competition
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A market structure in which there are many competing firms in the industry, free entry and exit from the market in the long run
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monopoly
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An industry controlled by a monopolist
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natural monopoly
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A monopoly that exists when increasing returns to scale provide a larger cost advantage to things produced at all ouput by a single firm
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normal profit
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An economic profit equal to zero. Profit just high enough to keep a firm engaged in its current activity
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oligopoly
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An industry with only a small number of producers
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optimal output rule
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Profit is maximized by producing the quantity of output at which marginal revenue of the last unit produced is equal to its marginal cost
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patent
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A temporary monopoly given by the government to the inventor for the sale of an invention
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perfectly competitive market
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A market in which all market participants are price takers
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price-taking consumer
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A consumer who's actions have no effect on the market price of the good or service they buy
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price-taking firm
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A firm whose actions have no effect on the market price of the good or service it sells
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production function
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The relationship between the quantity of inputs a firm uses and the quantity of output it produced
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short-run
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The time period in which at least one input is fixed
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sunk cost
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A cost that has already been incurred and is nonrecoverable
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total cost
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The sum of the fixed cost and variable cost of producing a quantity of output
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variable cost
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A cost that depends on quantity of output produced, the cost of the variable input
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variable input
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An input whose quantity the firm can vary at any time
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Production Possibilities Frontier/Curve
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Supply and Demand
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Price Ceiling Graph
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Price Floor Graph
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Quota market
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Producer/Consumer Surplus in Market Equilibrium (pg. 140)
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Total Utility
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Marginal Utility
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MR/MC Graph (pg. 183)
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Total Product Curve
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Marginal Product Curve
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ATC/AVC/AFC/MC Graph (pg.200 add in AFC)
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LRATC
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