Economics of work and leisure Flashcards
Abnormal Profit
Profit in excess of normal profit, total revenue is greater than total cost.
Allocative Efficiency
Where price is equal to marginal cost.
Average total cost/Unit cost of production
Total cost divided by output
Average product
Product produced by every worker when we divide the product by output.
Barrier of entry
Ostacle to new firms entering the market
Collusion
Where firms tacitly or otherwise agree to no compete on prices, services provision, and other matters which might adversely affect mutual well being
Competition and Markets Authority
Work to promote competition for the benefit of consumers aim, and make markets work well for consumers, businesses and the economy.
Con-testability
The extent to which barriers to entry and exit in a market are free and costless.
Diseconomies of scale
An increase in long run average costs caused by an increase in the scale of production.
Duopoly
Situation where two companies one all/nearly all the market for a given product or service.
Economies of Scale
A reduction in long run average costs resulting from an increase in the scale of an economy.
External Economies
Economies of scale which result from a growth in the industry and benefit from the firms within an industry.
Factors of production
Inputs used in the supply of goods and services. LAND LABOUR CAPITAL ENTREPRENEURSHIP
Fixed costs
Costs that do not change in the short run with changes in output, that are independent of output produced.
Hit and run pricing
Firms quickly entering a market when there are supernormal profits and leaving it when profits disappear
