Market Structures: Pure Competition

These flashcards cover key concepts related to the market structure of pure competition, as discussed in the lecture.

Pure Competition

A market structure characterized by a large number of sellers offering a standardized product where individual providers cannot influence the price.

Price Taker

A firm that must accept the market price as given; it cannot influence the price of the product it sells.

Standardized Product

A product that is viewed by consumers as identical, regardless of who produces it.

Marginal Revenue

The additional revenue generated from selling one more unit of a good or service.

Average Total Cost

Total cost divided by the quantity produced, used to determine profit or loss.

Shutdown Point

The production level at which a firm's revenues are insufficient to cover its variable costs.

Fixed Costs

Costs that do not change with the level of output, such as rents or salaries.

Variable Costs

Costs that vary with the level of output, such as materials and labor used in production.

Economic Profit

Total revenue minus total costs, including both explicit and implicit costs.

Market Price

The price at which goods are sold in a market, determined by the forces of supply and demand.