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| 520565369 | Perfect competition | The decisions of individual buyers and sellers have no effect on prices. The firm is a price taker. An industry where many small firms produce a nearly identical product. | |
| 520565370 | Perfectly elastic | The demand curve for a perfectly competitive market is a horizontal line. A 1% change in price leads to a greater than 1% change in demand | |
| 520565371 | Unitary Elastic | A price change leads to no change in the revenue for the product. | |
| 520565372 | Perfectly Inelastic | When the price changes and there is no change in demand or revenue. | |
| 520565373 | Price Elasticity Of Demand | Responsiveness of demand to a change in a product's price. | |
| 520565374 | Elastic Demand | A 1% change in price leads to a greater than 1% change in demand. In elastic demand, when price is reduced, total revenues rise. The larger the number of substitutes, the greater the elasticity. | |
| 520565375 | Inelastic Demand | A 1% change in price leads to a less than 1% change in demand. | |
| 520565376 | Total Cost | Fixed cost plus variable cost | |
| 520565377 | Fixed Costs | _____ ____ are costs that must be paid whether or not a product is produced; loans, capital equipment, utilities, salaries of senior management and staff. Also called operating costs. ____ _______ do not vary with output. | |
| 520565378 | Variable Cost | __________ ______ vary with changes in inputs. In the long run all costs are variable costs. 70% of ____ ____are labor costs. | |
| 520565379 | Total Revenue | Price times quantitiy. | |
| 520565380 | Marginal Product | Producing one more unit. The change in total production associated with producing one more unit. | |
| 520565381 | Marginal Cost | The increase in total costs from producing one more unit. The cost of producing one more unit, | |
| 520565382 | Profits | _______are the difference between total cost and price. They are rewards for innovation and risk taking by entrepreneurs. _____ are a signal to producers that they are meeting consumers' needs. | |
| 520565383 | Short-Run Breakeven (Tr=Tc) | The point at which a firm earns normal or accounting profits. When total revenues equal total costs there are accounting profits only | |
| 520565384 | Economic Profits | MR = MC: Marginal revenue at its highest, marginal cost at its lowest. Also, TR minus implicit/explicit costs. A profit in excess of accounting profits is called economic or pure profits. ____ ____are above accounting profits and include accounting profits. It is possible for a single firm to make economic profits while the industry cannot. If MR and MC come together above the average total cost curve, pure economic profits are maximized. | |
| 520565385 | Profit Maximization -- (MR=MC) | A ____ ____ing firm will choose the technology that minimizes cost. In a competitive market, all firms seek to maximize profits. | |
| 520565386 | Least Cost Combination of Resources | All firms seek to maximize profits by using the combination of labor and technology that minimizes costs. | |
| 520565387 | Revenue Maximization (TR>TC) | ____ ____occurs at the long run, second breakeven; accounting profits occur both at the short-run breakeven and the long run breakeven. | |
| 520565388 | Marginal Revenue | Increase in Total Revenues associated with adding one more unit of a product. | |
| 520565389 | Functions of Price | Price organizes the market, rations scarce goods, steers resources in to their most efficient or profitable use. | |
| 520565390 | Economies of Scale | Implies that as one unit of input is added, output increased by more than one unit. Increased production leads to lower average costs per unit. Economies of scale are a result of increased specialization. | |
| 520565391 | Dis-Economies of Scale | __________ of scale are a result of problems with coordination and communication in large firms and poor management. Increase in inputs leads to higher per unit cost. One unit in, less than one unit out. | |
| 520565392 | Constant Return To Scale | One unit in, one unit out. If input doubles, output doubles. | |
| 520565393 | Natural Monopoly | A monopoly that can take advantage of decreasing average costs. Where a single firm can produce all of the industry's output at a lower per-unit cost than other firms. | |
| 520565394 | Government Barriers and Monopoly | In order for a monopoly to exist, there must be barriers. | |
| 520565395 | Patents, Copyrights And Trademarks | The barriers that prevent competition and protect a monopoly. They are Government sanctioned monopolies. | |
| 520565396 | Monopoly Demand Curve and Profits | The ____ ____ ______is the market curve. Monopolies do not always earn a profit. Monopolies seek to maximize profits, not meet the full demand of consumers. | |
| 520565397 | Price Searcher-Trial and Error | Monopoly firms use trial and error to find the price that maximizes profit. They are____ ____ | |
| 520565398 | Price Taker | Firms in a perfectly competitive market (perfect competition) are ____ ____. | |
| 520565399 | Monopolistic Competition | Each firm holds a relatively small market share. In a monopolistic competition there tends to be zero economic profits. They are price takers. A market where there are a large number of firms that produce similar but not identical products. | |
| 520565400 | Kinked Demand Curve | An analysis used to explain why price changes are infrequent in an oligopoly. In ____ ____ theory, prices tend to be inflexible. | |
| 520565401 | Cartel/Collusion | A ______ is an international association of producers who agree to set common prices and restrict output. . _________ is national. Collusion among oligopolists is difficult because of demand and cost differences. | |
| 520565402 | Oligopoly/Oligopolis | An ________ is where 4 to 8 firms dominate the market. An _________ assumes competitors will not follow suit when he raises prices but will when he lowers prices. | |
| 520565403 | Product Differentiation | Distinguishing a product by name brand, color, or attributes | |
| 520565404 | Price Discrimination | Selling a product at more than one price where cost is not a consideration. Student discounts; senior citizen discounts, etc. Selling a product at more than one price where cost is not a consideration. | |
| 520565405 | Game Theory | A method of describing possible outcomes in various business situations. This is called: analysis of oligopoly behavior. | |
| 520565406 | Horizontal Merger | A merger involving companies that sell similar products.. | |
| 520565409 | Pure Rent | Payment for any resource with a limited supply. | |
| 520565410 | Minimum Efficient Scale | The lowest level at which a firm can minimize long range average costs | |
| 520565412 | Utility | _______ refers to the usefulness or satisfaction received from using a product. The satisfaction a product provides. | |
| 520565413 | Marginal Utility | The utility gained from consuming one more unit. | |
| 520565414 | Total Utility | ____ ____ is the increase in satisfaction a consumer realizes from consuming an additional unit of a product. | |
| 520565415 | Price Floor | Minimum price fixed by a firm or the government. A _______ _______ leads to a surplus. A price floor is above the market price. An example is farm subsidies. | |
| 520565416 | Price Ceiling | The ______ ______ is below market prices and is established by the government. It is the maximum legal price a seller can charge. It leads to a shortage. An example is wage and price controls. | |
| 520565417 | Diminishing Marginal Returns | Implies increasing marginal cost. Marginal returns and marginal products are expressions of the same thing. | |
| 520565418 | Implicit Costs | _________ ________ are payments made to the owners of the firm. | |
| 520565419 | Explicit Costs | ________ _________ are payments made to non-owners of the firm. | |
| 520565420 | Productivity | An increase in capital investment increases the output per unit of input - the _______ of labor. A ¼% increase in investment will increase productivity by 1% The average product produced is a measure of output per worker | |
| 520565421 | Production Costs | A decrease in the cost of the inputs (factors) leads to lower per unit production costs. A shift in consumer tastes and preferences will cause total production to change. | |
| 520565422 | Average Total Cost | Total fixed costs divided by quantity produced | |
| 520565423 | Pareto Positive Superior Theorem | I've got something you want. You've got something I want. Let's make a deal. | |
| 520565424 | Interest And Dividends | ______ is the price paid for the use of money. _______ are income earned from investments. ____ and ____are the two forms of capital. | |
| 520565425 | Purchasing Power | A decline in prices, or price level, will increase the consumer's ____ ____. | |
| 520565426 | Retained Earnings | Corporate profits after taxes are divided into two categories, dividends and retained earnings. ____ ____ are used for internal financing. | |
| 520565427 | Depreciation | ________ is also called the consumption of fixed capital. | |
| 520565428 | Derived Demands | The demand for the inputs or factors of production. | |
| 520565429 | Tariffs | _______ are a tax on imported goods. They are an excise tax | |
| 524928642 | Monopoly / Monopolist | The supplier of a good or service for which there is no close substitute. In a _______ prices tend to be inelastic. A _________ does not always earn a profit. | |
| 530121894 | Substitution Effect | When the price of a product falls, people buy more of it. |
