Terms : Hide Images
| a market structure where there are many buyers and sellers, all firms sell identical products, and there are no barriers to new firms entering the market; all firms are price-takers | ||
| a seller (or buyer) that is unable to affect the price at which a product or resource sells by changing the amount it sells (or buys) | ||
| the fraction of the total industry output accounted for by a particular firm | ||
| a market structure where there is only one producer of a good (with no close substitutes) and firms are blocked from entering the market; also pure monopoly | ||
| a situation in which economies of scale are so large that one firm can supply the entire market at a lower average total cost than can two or more firms | ||
| a market structure in which only a few sellers offer similar or identical products | ||
| market situation in which individual or group buys or sells a good or service in amounts large enough to affect price; includes monopoly, oligopoly, and monopolistic competition | ||
| define oligopolistic market structure; the percentage of sales accounted for by the X largest firms in the industry (often 4 or 8) | ||
| the square of each firms share of market sales summed over the firms in the industry | ||
| a market structure of an industry in which there are many firms and freedom of entry and exit but in which each firm has a product somewhat differentiated from the others, giving it some control over its price | ||
| the price at which economic profit is zero; price equals average total cost | ||
| the price at which the firm is indifferent to production, where producing and shutting down result in losses equal to fixed costs; price equals average variable cost | ||
| shows how an individual producer's profit-maximizing output quantity depends on the market price, taking fixed cost as a given; MC above the shut-down price | ||
| a curve that shows the relationship in the long run between market price and the quantity supplied | ||
| an industry in which expansion by the entry of new firms has no effect on the prices firms in the industry must pay for resources and thus no effect on production costs | ||
| an industry in which expansion through the entry of new firms raises the prices firms in the industry must pay for resources and therefore increases their production costs | ||
| an industry in which expansion through the entry of firms lowers the prices that firms in the industry must pay for resources and therefore decreases their production costs | ||
| the production of any particular mix of goods and services in the least costly way; when price is equal to minimum ATC; also known as productive efficiency | ||
| the production of the particular mix of goods and services most highly valued by society; also known as allocative efficiency; where P equals MC (MB=MC) | ||
| profit is maximized by producing the quantity of output at which the marginal revenue of the last unit produced is equal to its marginal cost; MR=MC rule |
