Term
| Technological advantages (Large-scale production) |
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Definition
| fewer inputs per unit of output |
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Term
| Cost advantages (large-scale production) |
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Definition
| costs that don’t depend on number of units produced (such as advertising or acquiring the necessary patents or other intellectual property rights (IPR)), have a smaller effect on the cost per unit |
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Term
| economies of scale/increasing returns |
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Definition
| These occur when doubling all of the inputs to a production process more than doubles the output. The shape of a firm’s long-run average cost curve depends both on returns to scale in production and the effect of scale on the prices it pays for its inputs |
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Term
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Definition
| Costs of production that do not vary with the number of units produced. Examples - advertising, a patent |
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Term
| decreasing returns to scale Also known as: diseconomies of scale |
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Definition
| these occur when doubling all of the inputs to a production process less than doubles the output. for example, having more ees means more managers (more payroll) |
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Term
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Definition
| A product produced by a single firm that has some unique characteristics compared to similar products of other firms. |
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Term
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| An indicator of how much a person values a good, measured by the maximum amount he or she would pay to acquire a unit of the good |
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Definition
| when the available quantity is low, the product can be sold at a high price |
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Term
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Definition
| A selling strategy in which different prices for the same product are set for different buyers or groups of buyers, or per-unit prices vary depending on the number of units purchased. |
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Term
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Definition
| Total cost divided by number of units produced |
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Definition
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Term
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Definition
| total revenue - total cost |
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Term
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Definition
| The lowest price at which someone is willing to sell a good (keeping the good is the potential seller’s reservation option). |
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Term
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Definition
| the curve that shows the number of units of output that would be produced at any given price. For a market, it shows the total quantity that all firms together would produce at any given price |
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Term
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Definition
| The curve that shows the number of units of output that would be produced at any given price. For a market, it shows the total quantity that all firms together would produce at any given price. |
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Term
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Definition
| price at which supply is equal to demand |
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Term
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Definition
| measure of consumer satisfaction, equal to WTP - market price OR area b/w demand curve and equilibrium price |
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