| A | B |
|---|
| pure competition | a market structure in which a very large # of firms sells a standardized product, into which entry is very easy, in which the individual seller has no control over the product price, and in which there is no nonprice competition; a market characterized by a very large # of buyers and sellers |
| pure monopoly | a market structure in whic one firm sells a unique product, into which entry is blocked, in which the single firm has considerable control over product price, and in which nonprice competition may or may not be found |
| monopolistic competition | a market structure in which many firms sell a differentiated product, into which entry is relatively easy, inwhich the firm has some control over its product price, and in which there is considerable nonprice competition |
| oligopoly | a market structure in which a few firms sell either a standardized or differentiated product, into which entry is difficult, in which the firm has limited control over product price bevause of mutual interdependence, and in which there is typically nonprice competition |
| standardized product | a product whose buyers are indifferent to the seller from whom they purchase it as long as the price charged by all sellers is the same; a product all units of which are identical and thus are perfect substitutes for each other |
| "price takers" | a seller of a product or resource that is unable to affect the price at which a product of resource sells by changign the amount it sells |
| average revenue | total revenue from the sale of a product divided by the quantity of the product sold (demanded); equal to the price at which the product is sold when all units of the product are sold at the same price |
| total revenue | the total number of dolalrs received by a firm from teh sale of a product; equal to the total expenditures fo rthe product produced by the firm; equal to the quantity sold multiplied by the price at which it is sold |
| marginal revenue | the change in total revenue that results from the sale of 1 additional unit of a firm's product; equal to the change in total revenue divided by the change in the quantity of the product sold |
| break-even output | any output at which a firm's total cost and total revenue are equal; an output at which a firm has neither an economic profit nor a loss, at which it earns only a normal profit |
| MR = MC rule | the principle that a firm will maximize its profit by producing the output at which marginal revenue and marginal cost are equal, provided product price is equal to or greater than average variable cost |
| short-run supply curve | a supply curve that shows the quantity of a product a firm in a purely competitive industry will offer to sell at various prices in the short run; the portion of the firm's short-run marginal cost curve that lies above its average-variable cost curve |
| constant-cost industry | an industry in which expansion by the entry of new firms has no effect on the prices firms in the industry must pay for resources and thus no effect on production costs |
| long-run supply | a schedule or curve showing the prices at which a purely competitive industry will make various quantities of the product available in the long term |
| constant-cost industry | an industry in which expansion by the entry of new firms has no effect on the prices firms in the industry must pay for resources and thus no effect on production costs |
| productive efficiency | the portion of a good in the least costly way; occurs when production takes place at the output at which average total cost is a minimum and marginal product per dollar's worth of input is the same for all inputs |
| allocative efficiency | the apportionment of resources among firms and industries to obtain the production of the products most wanted by society (consumers); the output of each product at which its marginal cost and price or marginal benefit are equal |
