Karteikarten
Market structure
Karten in diesem Stapel (51)
- 1There are many small firms, each producing an identical product and each too small to affect the market price.Perfect competition
- 2faces a completely horizontal demand (or dd) curveThe perfect competition
- 3the extra revenue gained from each extra unit sold is thereforeMarket price
- 4a firm will............. when it produces at that level where marginal cost equals price.Maximize profits
- 5the level of price, at which the firm breaks-even, covering all costs but earning zero-profitZero-profit point
- 6revenue= ?Variable costs
- 7Losses=?Fixed costs
- 8when revenues just cover variable costs or where losses are equal to fixed costsShutdown rule
- 9when the price falls below average variable costs.Shutdown rule
- 10Any change in outputs must use the same fixed amount of the factor productionshort-run equilibrium
- 11when capital and all other factors are variable and there are free entry and exit of firms from the industries.Long-run equilibrium
- 12when they are newly formed or when an existing firm decides to move into a new sector.entry
- 13when they stop producing because the line is unprofitable and can produce that the firms go bankrupt when it can´t pay billsexit
- 14when there are no barriers to entry or exit, such as government regulations or intellectual propoerty rights as patents and softward.free entry and exit
- 15is the price equals marginal cost equals the minimum long-run average cost for each identical firmzero-profit long run equilibrium
- 16Increase in demand for the commodity will raise the price of the commodityDemand rule
- 17An increase in supply of commodity will generally lower the price and increase the quantity bought and soldsupply rule
- 18it is when you can increase the annual outputs of a product by adding more labor to each acre of landincreasing costs
- 19will operate if variable factor of production are added to fixed amounts of factors such as landdiminish returns
- 20the payment for the use of such a factor of production when the quantity supplied is constant at every pricePure economic rent
- 21if the supply decreasethe price increase and quantity decrease
- 22if the supply increasethe price decrease and quantity increase
- 23the market is ------------ when it provides its consumers with the most desirable set of goods and services, given the resources and technology of the economyEfficiency
- 24occurs when no possible reorganization of production can make anyone better off without making someone else worse off.allocative efficiency
- 25is the balancing of supply and demand in a market or economy characterized by perfect competitioncompetitive equilibrium
- 26the difference between that amount that a consumer would be willing to pay for a commodity and the amount actually paidconsumer surplus
- 27the difference between the producer sales revenue and the producer's costs, its measured the area above the supply curve but under the price line up to the amount soldproducer surplus
- 28when a firm has market power in a particular market (monopoly). the firm can raise the price of its product above its marginal costsimperfect competition
- 29they arise when some of the side effects of production or consumption are not included in the market priceexternalities
- 30the invisible-hand theory that assumes that buyers and seller have complete information about the goods and services they buy or sellimperfect information
- 31prevails in an industry whenever individual sellers can affect the price of their outputImperfect Competition
- 32the major kinds of imperfect competition areMonopoly, oligopoly, and monopolistic competition
- 33Imperfect competitors areprice makers not price-takers
- 34a single seller with the complete control over an industruMonopoly
- 35Means "Few sellers". each individual firm can affect the market price example; car makersOligopoly
- 36a large number of sellers produce differentiated products.Monopolistic competition
- 37is a market in which the industry´s outputs can´t efficiently produce by several firmsNatural Monopoly
- 38are factors that make it hard for new firms to enter an industry.Barriers to entry
- 39an industry may have few firms and limited pressure to compete, is whenThe barriers are high
- 40Governments sometimes restrict competition in certain industries, include patents, entry restrictions.Legal restrictions
- 41advertising can create product awareness and loyalty to well- known brandsAdvertising and product differentiation
- 42the monopolistic practices lead to high prices ad low outputs and therefore reduce consumer welfare.Monopoly behavior
- 43the conditions of maximization in perfect competitionP=MC
- 44The conditions of maximization in monopolyMI=MC
- 45Is the change in revenue that is generated by an additional unit of sales.Marginal revenue
- 46what is the relation between the price elasticity of demand and marginal revenue?Marginal revenue is positive when demand is elastic
Zero when demand is unit-elastic
and negative when demand is inelastic - 47will occur when outputs are at the level where the firm's marginal revenue when is equal to his marginal costMaximum profit
- 48monopoly equilibrium is also calledmaximum-profit point
- 49a monopolistic will maximize its profits by setting output at the lever whereMC=MR
- 50The marginal principleLet bygones be bygones
- 51Means that the people will maximize their incomes or profits or satisfaction by counting only the marginal costs and marginal benefits of a decisionMarginal principle