Market Structures Perfect Comp Flashcards
Price Taker
A buyer or seller that is unable to affect the market price
Profit
Total revenue minus total cost
Average Revenue
Total revenue divided by the number of units sold
Marginal Revenue
Change in total revenue from selling one more unit
Long Run Competitive Equilibrium
The situation in which the entry and exit of firms has resulted in the typical firm breaking even
Sunk Cost
A cost that has already been paid and that cannot be recovered
Shutdown Point
the minimum point on a firm’s average variable curve, Price falls below this point firm will shut down
Economic Profit
A firm’s revenue minus all its costs (Implicit and Explicit)
Economic Loss
The situation in which a firms total revenue is less than it’s total cost (includes implicit cost)
Long Run Supply Curve
A curve showing the relationship between market price and quantity supplied
Productive Efficiency
The situation in which a Gns is produced with the least amount of resource
Allocative Efficiency
Every GnS is produced to MC = MB
Dynamic Efficiency
Ability of firms to deviate and utilise tech innovation and adapt product to changes in consumer preferences
