Chapter 9: Firms in a Competitive Market Flashcards
1
Q
has no control over the price set by the market; it “takes” (accepts) the price determined by the overall supply and demand conditions that regulate the market
A
price taker
2
Q
the change in total revenue a firm receives when it produces one additional unit of output
A
marginal revenue
3
Q
states that profit maximization occurs when a firm chooses the quantity of output that equates marginal revenue and marginal cost, or MR=MC
A
profit-maximization rule
4
Q
unrecoverable costs that have been incurred as a result of past decisions
A
sunk costs
5
Q
in relation to profits and losses; convey information about the profitability of various markets
A
signals
