Studied by 0 people
Looks like no one added any tags here yet for you.
Demand Schedule
Table showing price, quantity, total cost.
Max Profit Condition
Occurs where marginal revenue equals marginal cost.
Perfect Price Discrimination
Monopolist charges each consumer their maximum willingness to pay.
Social Waste
Inefficiency due to monopolistic practices.
Output Level Comparison
Monopolists produce less than perfect competition.
Consumer Surplus
Eliminated under perfect price discrimination.
Total Revenue Curve
Graph showing total revenue at different output levels.
Economic Profit
Profit when total revenue exceeds total cost.
Deadweight Loss
Loss of economic efficiency due to monopoly pricing.
Market Structure Characteristics
Includes barriers to entry, number of sellers.
Allocative Efficiency
Marginal price equals marginal benefit.
Short-Run Adjustment
Illustrated by marginal cost curve.
Shutdown Point
Price where firm incurs losses equal to fixed costs.
Marginal Revenue Definition
Change in total revenue from selling one more unit.
Profit Maximizing Output
Where vertical distance between TR and TC is greatest.
Minimizing Losses
Firm should shut down or cover fixed costs.
Long-Run Demand Increase
Leads to more firms entering the industry.
Oligopoly Characteristics
Few firms, interdependent pricing, barriers to entry.
Monopolist Pricing
Price set above marginal cost.
Price Elasticity of Demand
Measure of responsiveness of quantity demanded to price change.
Marginal Cost Curve
Shows cost of producing one more unit.
Short Run vs Long Run
Short run has fixed resources; long run does not.
Game Theory
Strategy analysis for firms in oligopoly.
Sunk Cost
Fixed costs that cannot be recovered.
Marginal Profit
Additional profit from selling one more unit.
Patents
Encourage innovation by protecting inventors' rights.
Market Power
Ability to set prices above marginal cost.
Differentiated Products
Products that are not identical among firms.
Price Takers
Perfectly competitive firms with no market power.
Total Revenue Equation
Total revenue equals price times quantity.
Average Revenue
Total revenue divided by quantity sold.
Long-Run Industry Supply Curve
Horizontal under constant costs in perfect competition.
Advertising Costs
Incurred by monopolists to maintain market power.
Monopolistic Competition
Many firms selling differentiated products.
Oligopoly Pricing
Higher prices due to limited competition.
Marginal Revenue Curve
Decreases as output increases for monopolists.
Total Cost Curve
Graph showing total costs at different output levels.
Economic Efficiency
Achieved when resources are allocated optimally.
Price Discrimination
Charging different prices for the same product.
Perfect Competition
Market structure with many buyers and sellers.
Market Structure Types
Includes perfect competition, monopoly, oligopoly.
Demand Curve
Graph showing relationship between price and quantity demanded.
Profit Maximization Condition
Occurs where MR equals MC.
Long Run Equilibrium
Occurs when firms earn normal profits.
Short Run Equilibrium
Temporary state where firms may earn supernormal profits.
