Economics how markets work Flashcards
The additional income for selling one more unit of a good
Marginal Revenue
The law of supply says that the higher the price ____
the more supplied
The best way to maximize your revenue is when marginal revenue is greater than or equal to _____
marginal cost
What is the name for the amount of money a company makes
profit
Any factor that make it difficult for a firm to enter a market
Barrier of entry
When companies divide customers into groups based on who would pay for the good
Price Discrimination
What is it when goods are used in place of each other
substitutes
A government payment that supports a business or a market
Subsidy
The minimum price for a good or service
Price floor
What is one reason to have a perfectly competitive market
Informed Buyers and sellers
The point at which supply and demand cross and are equal
Equilibrium
This is the maximum price that can be legally charged
Price Ceiling
The expenses a firm must pay before they can sell goods
startup cost
This is where you allocate scarce goods based on some other criteria other than price
rationing
The type of cost that rises or falls depending on how much is produced
Variable Cost
