Understanding Monopoly and Competition

These flashcards cover key concepts related to the structure and operational aspects of monopolies and competition in economic theory.

Economic Profit

Total revenue minus total cost.

Average Variable Cost

The variable cost per unit of output.

Monopoly

A market structure with a single seller that controls the price of a good or service.

Price Maker

A firm that has the ability to influence the price of the product it sells.

Demand Curve

A graph showing the relationship between price and the quantity demanded.

Marginal Revenue

The additional revenue gained from selling one more unit of a product.

Fixed Cost

Costs that do not change with the level of output.

Natural Monopoly

A type of monopoly that arises when a single firm can supply the entire market at a lower cost than multiple firms.

Patent

A government grant giving the inventor exclusive rights to produce and sell a product for a certain period.

Single Price Monopoly

A monopoly that sells its product at the same price for all units sold.