Term
| Perfectly competitive market |
|
Definition
| A market that meets the conditions of (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market. |
|
|
Term
|
Definition
| A buyer or seller that is unable to affect the market price. |
|
|
Term
|
Definition
| Total revenue minus total cost. |
|
|
Term
|
Definition
| Total revenue divided by the quantity of the product sold. |
|
|
Term
|
Definition
| Change in total revenue from selling one more unit of a product. |
|
|
Term
|
Definition
| A cost that has already been paid that cannot be recovered. |
|
|
Term
|
Definition
| The minimum point on a firm's average variable cost curve; if the price falls below this point, the firm shuts down production in the short run. |
|
|
Term
|
Definition
| A firm's revenue minus all its costs, implicit and explicit. |
|
|
Term
|
Definition
| The situation in which a firm's total revenue is less than its total cost, including all implicit costs. |
|
|
Term
| Long-run competitive equilibrium |
|
Definition
| The situation in which the entry and exit of firms has resulted in the typical firm breaking even. |
|
|
Term
|
Definition
| A curve that shows the relationship in the long run between market price and the quantity supplied. |
|
|
Term
|
Definition
| The situation in which a good or service is produced at the lowest possible cost. |
|
|
Term
|
Definition
| A state of the economy in which production represents consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit equal to the marginal cost of producing it. |
|
|
