ECON 3211 Notes 10-30-24
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10 Terms
Marginal Revenue (MR)
The additional revenue gained from selling one more unit of a good.
Total Revenue (TR)
The total income generated from the sale of goods or services.
Average Revenue (AR)
Total revenue divided by the quantity sold, which equals the price in perfect competition.
Price Taker
A firm that cannot influence the market price and must accept it as given, common in perfect competition.
Profit Maximization Condition
Occurs when a firm produces at a level where marginal revenue equals marginal cost (MR = MC).
Fixed Cost (FC)
Costs that do not change with the level of output.
Average Total Cost (ATC)
Total cost divided by the quantity of output produced, which includes both fixed and variable costs.
Profit
The difference between total revenue and total cost.
Perfect Competition
A market structure characterized by many firms, identical products, and free entry and exit.
Total Cost (TC)
The total expenses incurred in reaching a particular level of output.