ch 14 Flashcards
1
Q
perfect competition price =
A
mc
2
Q
what does market power allow firms to do in terms of prices
A
raise above the mc of production
3
Q
higher prices lead to
A
lower quantity demanded
4
Q
inefficient quantity means
A
firms mc is below demand curve at that quantity
5
Q
market failiure =
A
underproduction
6
Q
market power yields
A
larger economic profits
7
Q
market power is
A
more profitable than perfect competition
8
Q
profit margin =
A
price - average per unit cost to produce or mc
9
Q
market power gives you less pressure to
A
adopt cost-saving measures
10
Q
in perfect competition, ineffcient businesses
A
will close
