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Definition
| A market structure in which a very large number of firms sells a standardized product, into which entry is very easy, in which the individual seller has no control over the product price, and in which there is no nonprice competition; a market characterized by a very large number of buyers and sellers. |
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| A market structure in which one firm sells a unique product, into which entry is blocked, in which the single firm has considerable control over product price, and in which nonprice competition may or may not be found. |
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| A market structure in which many firms sell a differentiated product, into which entry is relatively easy, in which the firm has some control over its product price, and in which there is considerable nonprice competition. |
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| A market structure in which a few firms sell either a standardized or differentiated product, into which entry is difficult, in which the firm has limited control over product price because of mutual interdependence (except when there is a collusion among firms), and in which there is typically nonprice competition. |
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Definition
| All market structures except pure competition; includes monopoly, monopolistic competition, and oligopoly. |
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Definition
| A seller (or buyer) of a product or resource that is unable to affect the price at which a product or resource sells by changing the amount it sells (or buys). |
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| Total revenue from the sale of a product divided by the quantity of the product sold (demanded); equal to the price at which the product is sold when all units of the product are sold at the same price. |
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Definition
| The total number of dollars received by a firm from the sale of a product; equal to the total expenditures for the product prodcued by the firm; equal to the quantity sold (demanded) multiplied by the price at which it is sold. |
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Definition
| The change in total revenue that results from the sale of 1 additional unit of a firm's product; equal to the change in total revenue divided by the change in the quantity of the product sold. |
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Definition
| An output at which a firm makes a normal profit (total revenue = total cost) but not an economic profit. |
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Definition
| The principle that a firm will maximize its profit (or minimize its losses) by producing the output at which marginal revenue and marginal cost are equal, provided product price is equal to or greater than average variable cost. |
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Definition
| A supply curve that shows the quantity of a product a firm in a purely competitive industry will offer to sell at various prices in the short run; the portion of the firm's short-run marginal cost curve that lies above its average-variable-cost curve. |
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Term
| Long-Run (aggregate) Supply Curve |
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Definition
| The aggregate supply curve associated with a time period in which input prices (especially nominal wages) are fully responsive to changes in the price level. |
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Definition
| An industry in which expansion by the entry of new firms has no effect on the prices firms in the industry must pay for resources and thus no effect on production costs. |
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| An industry in which expansion through the entry of new firms raises the prices firms in the industry must pay for resources and therefore increases their production costs. |
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Definition
| An industry in which expansion through the entry of firms lowers the prices that firms in the industry must pay for resources and therefore decreases their production costs. |
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Definition
| The production of a good in the least costly way; occurs when production takes place at the output at which average total cost is a minimum and marginal product per dollar's worth of input is the same for all inputs. |
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Definition
| The apportionment of resources among firms and industries to obtain the production of the products most wanted by society; the output of each product at which its marginal cost and price or marginal benefit are equal. |
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Definition
| The difference between the maximum price a consumer is willing to pay for an additional unit of a product and its market price; the triangular area below the demand curve and above the market price. |
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Definition
| The difference between the actual price a producer receives and the minimum acceptable price; the triangular area above the supply curve and below the market price. |
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