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21 Cards in this Set
- Front
- Back
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Supply
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amount of a product that a firm is willing & able to sell over a certain period of time
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Competitive Market
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market in which a large number of firms sell very similar or identical products, consumers are well informed about the price that each firm charges for its product, & resources move easily into & out of the market in response to profits & losses
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Price Taker
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firm or individual who has no influence over the market price
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Individual Firm's Supply Schedule
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quantity that the firm is willing & able to supply at each price, other things equal
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Individual Firm's Supply Curve
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graphical representation of the individual firm's supply schedule
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Law of Supply
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Other things equal, the lower the price of a product, the smaller the quantity supplied; the higher the price of a product, the larger the quantity supplied
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Marginal Cost
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addition to total cost of producing an additional unit of output; in general, the change in total cost divided by the change in output
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Marginal Cost Curve
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graphical representation of marginal cost, showing at each output the addition to total cost of producing an additional unit of output
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Supply Rule for Maximizing Profit
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competitive firm should produce the output at which price (marginal revenue) equals marginal cost
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Marginal Benefit
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additional benefit, in terms of objectives, of the next unit of activity
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Marginal Revenue
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increase in total revenue from selling one more unit of output; equal to price for a competitive firm
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Short Run
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period of time short enough that at least one factor of production remains fixed & long enough that at least one factor is variable
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Long Run
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period of time long enough that the firm is able to vary all factors of production & firms can enter or leave the industry
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Law of Diminishing Returns
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as increasing amounts of a variable factor of production are added to one or more fixed factors of production, the marginal product of the variable factor eventually declines
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Marginal Product of Labor
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additional output produced by hiring one more unit of labor, holding all other factors of production constant
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Market Supply Schedule
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total quantity that all firms in the market are willing & able to supply at each price, other things equal; sum of the individual firms' supply schedules
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Market Supply Curve
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graphical representation of the market supply schedule; also called the industry supply curve
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Change in Quantity Supplied
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movement along the supply curve as price changes, other things equal
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Change in Supply
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a shift in the entire supply curve
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(Price) Elasticity of Supply
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measure of the responsiveness of quantity supplied to a change in the price along the supply curve; specifically, percentage change in quantity supplied divided by percentage change in price
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Momentary Run
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period of time during which output is set & a supply response is impossible
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