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10 Cards in this Set

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  • Back
Profit maximisation
The level of output where TR is furthest apart from TC. Occurs where MR = MC.
Revenue maximisation
The level of output where the TR curve is flat. Occurs where MR = 0.
Sales maximisation
The highest level of output that can be attained without incurring a loss. Occurs where TR = TC, or AR = AC.
Cost-plus pricing
Where price is set at average cost plus a certain percentage mark-up.
Predatory pricing
Where P < AVC, in order to eliminate existing competition in the market.
Limit pricing
Where price is set below the AC of potential rivals, in order to prevent new firms entering the market.
Non-price competition
Where the firm aims to attract new customers through branding, quality and innovation.
Cartel
A formal agreement between two or more firms to fix prices and / or output, thereby avoiding a price war.
Collusion
A secret and informal agreement between two or more firms to fix prices and / or output, thereby avoiding a price war.
Tacit collusion
Where firms refrain from price competition, but without any communication or formal agreement.