Market Structures & Profit Maximization

These flashcards cover key vocabulary related to market structures and profit maximization concepts.

Perfect Competition

A market structure where there are many firms, a standardized product, and no barriers to entry.

Monopolistic Competition

A market structure characterized by many firms offering differentiated products and having some control over prices.

Oligopoly

A market structure dominated by a few firms, often leading to mutual interdependence and high barriers to entry.

Monopoly

A market structure where a single firm controls the entire market for a unique product, with no close substitutes.

Price Taker

A firm in perfect competition that must accept the market price as given.

Marginal Revenue (MR)

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

Marginal Cost (MC)

The additional cost incurred from producing one more unit of a product.

Economic Profit

Total Revenue minus both explicit and implicit costs.

Collusion

An illegal agreement between firms to restrict competition and act like a monopoly.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded.

Entry Barriers

Obstacles that make it difficult for new firms to enter a market.

Price Control

The ability of a firm to influence the price of its products in the market.

Total Revenue (TR)

The total income generated from sales, calculated as Price multiplied by Quantity.