Term
|
Definition
|
|
Term
|
Definition
| ownership; funds investors or owners put into a firm |
|
|
Term
|
Definition
| accounting profit minus the cost of equity capital |
|
|
Term
|
Definition
| total revenue is less than total costs, including opportunity costs |
|
|
Term
|
Definition
| total revenue equals total costs; including opportunity costs |
|
|
Term
|
Definition
the accounting profit that corresponds to a zero economic profit |
|
|
Term
|
Definition
| total revenue exceeds total costs, including opportunity costs |
|
|
Term
|
Definition
| a firm in a perfectly competitive market structure |
|
|
Term
|
Definition
| price that is equal to the minimum point of the average-variable-cost curve |
|
|
Term
|
Definition
| a price that is equal to the minimum point of the average-total-cost curve |
|
|
Term
|
Definition
| the situation in which the price of a good or service just covers the marginal cost of producing that good or service and people are getting the goods and services that they want |
|
|
Term
|
Definition
the difference between the price firms would have been willing to accept for their products and the price they actually receive |
|
|
Term
|
Definition
| a market structure in which there is a single supplier of a product |
|
|
Term
| Monopoly firm (monopolist) |
|
Definition
| a single supplier of a product for which there are no close substitutes |
|
|
Term
|
Definition
anything that impedes the ability of firms to begin a new business in an industry in which existing firms are earning positive economic profits |
|
|
Term
|
Definition
| a monopoly that arises from economies of scale |
|
|
Term
|
Definition
| a monopoly that exists in a limited geographic area |
|
|
Term
|
Definition
| a monopoly firm whose behavior is monitored and prescribed by a government entity |
|
|
Term
|
Definition
| market power, the ability to set prices |
|
|
Term
|
Definition
| a firm that sets the price of the product it sells |
|
|
Term
|
Definition
an attempt by a firm to dominate a market or become a monopoly |
|
|
Term
|
Definition
charging different customers at different prices for the same product |
|
|
Term
|
Definition
the reduction of consumer surplus without a corresponding increase in profit when a perfectly competitive firm is monopolized |
|
|
Term
|
Definition
| the behavior that occurs when what is best for A depends on what B does, and what is best for B depends on what A does |
|
|
Term
|
Definition
a description of oligopolistic behavior as a series of strategic moves and countermoves |
|
|
Term
|
Definition
| a strategy that produces better results no matter what strategy the opposing firm follows |
|
|
Term
|
Definition
| an organization of independent firms whose purpose is to control and limit production and maintain or increase prices and profits |
|
|
Term
|
Definition
| actions by oligopolistic firms that can contribute to cooperation and collusion even though the firms do not formally agree to cooperate |
|
|
Term
|
Definition
| a pricing policy whereby a firm computes its average cost of producing a product and then sets the price at some percentage above this cost |
|
|
Term
| Most-favored customer (MFC) |
|
Definition
| a customer who receives a guarantee of the lowest price and all product features for a certain period of time |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
Accounting Profit Formula |
|
Definition
Accounting Profit = (PQ) - (cost of resources) (does not include opportunity costs) |
|
|
Term
|
Definition
Economic Profit= accounting profit - cost of equity capital (includes all opportunity costs) |
|
|
Term
| Profit is maximized when ___ = ___ |
|
Definition
|
|
Term
| Loss is minimized when ___ = ___ |
|
Definition
|
|
Term
|
Definition
|
|
