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MicroEcon Ch8 - Perfect Competition

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level of output where the marginal cost curve intersects the average variable cost curve at the minimum point of AVC; if the price is below this point, the firm should shut down immediately.

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Terms in this set (9)

level of output where the marginal cost curve intersects the average variable cost curve at the minimum point of AVC; if the price is below this point, the firm should shut down immediately.

shutdown point.

a firm in a perfectly competitive market that must take the prevailing market price as given.

each firm faces many competitors that sell identical products.

perfect competition.

the conditions in an industry, such as number of sellers, how easy or difficult it is for a new firm to enter, and the type of products that are sold.

market structure.

the additional revenue gained from selling one more unit.

marginal revenue.