Upgrade to remove ads
Terms in this set (37)
Profit is maximized at the output at which marginal revenue exceeds marginal cost by the greatest margin.
Total profit is represented by the vertical distance between a total revenue curve and a total cost curve.
Perfectly competitive markets feature relatively high barriers to entry.
Perfectly competitive firms are known for being "price makers", not price takers.
In perfect competition, a firm's marginal revenue equals the price of the product.
A firm operating at MC=MR must be making a profit.
The lowest price that a perfectly competitive firm will accept without closing its doors is found by examining the average variable cost curve.
If there are many close substitutes available for a good, its elasticity of demand will be higher.
Total fixed cost increases as output increases.
The law of diminishing marginal returns is the same as increasing returns to scale.
Economists and accountants use the same definition of profit.
Price and output decisions are two aspects of the same choice.
Total revenue cannot be derived from the demand curve or a demand schedule.
A small business owner who is earning a positive economic profit, no matter how small, is doing better than if she sold her business and went to work for another firm.
Marginal revenue is the addition to total revenue resulting from the addition of one unit to total output.
If the marginal profit of the next unit is negative, the firm should produce more output in order to generate greater profit.
In order to maximize profits, a firm should adjust output until marginal profit is equal to zero.
When firm's fixed costs increase it should raise its prices in order to maximize profits.
In perfect competition there are differences in the products sold by various firms.
In perfect competition, a firm's marginal revenue equals average revenue.
The short-run equilibrium output of a competitive firm is found by equating marginal cost with price.
In a long-run equilibrium in a perfectly competitive market, the average firm earns positive economic profits.
The addition to total output due to an additional unit of input, holding all other inputs constant
The marginal physical product of an input is:
Output should be reduced
To establish a benchmark by which to measure the performance of the company
Economists study perfect competition:
Earn economic losses
In the short run, this firm would:
Earning economic profit greater than zero
At S1, the firm is:
In the above table, which firm is better off staying in business in the short run?
Chooses either output or price, and consumer demand determines the other
In arriving at the quantity of output and pice of its product, a company:
Total profit defined this way is called:
Average revenue curve
The demand curve facing a firm is also the firm's:
A large number of small firms
Which of the following is a characteristic of a perfectly competitive market?
Demand curve of the perfectly competitive industry is perfectly elastic
Which of the following observations is not true?
Vertical distance between the two curves is greatest
A company draws its total cost curve and total revenue curve on the same graph. If the firm wishes to maximize profits, it will select the output at which the:
Horizontally summing the supply curves of the firms industry
The supply curve for a perfectly competitive industry is obtained by:
The number of firms
In the long run we would expect an increase in:
Long-run average cost curve
The long-run supply curve of an industry equals the industry's:
This set is often in folders with...
ECON UNIT 6 PAPER 3
ECON Chapter 11
Microeconomics chapter 10
Econ MBA 626 - Module 1.3
You might also like...
ECON 202 CH.10
Other sets by this creator
Accounting Chapter 2 Vocal
Accounting Chapter 1 Vocab
Interpersonal Power and Influence
Other Quizlet sets
AP.Lang September vocab
Ch. 4 (test 2)
Geography 2nd Semester Final
Lecture 31: The Heart