ECO/365T: Principles Of Microeconomics
All firms maximize profits by producing the quantity of output at which the marginal ________ is equal to the marginal __________.
Blank 1: revenue Blank 2: cost or costs
A company can break even and meet operating costs without a loss when it earns __________ economic profit.
Blank 1: zero or normal
Total ________ equals price times quantity
revenue
A firm sustains a loss if
TR < TC
Firms that take or accept the market price and have no ability to influence that price are known as price _______________ .
takers
When the total revenue earned by a firm is less than the total cost of production:
the firm faces a loss.
Total profit equals ( ___________ revenue minus __________ total cost) multiplied by output.
Blank 1: average Blank 2: average
In a perfectly competitive market, we assume the product is identical in the minds of ___________.
Blank 1: consumers, buyers, or customers
Profit equals (average _______________ (revenue/cost) minus average total ______________ (revenue/cost) multiplied by output.
Blank 1: cost Blank 2: revenue
Total revenue minus the __________ and ____________ costs of production is economic profit.
Blank 1: explicit Blank 2: implicit
Total revenue minus the ___________ and____________ costs of production is economic profit.
Blank 1: explicit or fixed Blank 2: implicit or variable
All firms maximize by producing the quantity of output at which the marginal revenue is equal to the marginal cost.
Blank 1: profit or profits
Extra or additional revenue associated with the production of an additional unit of output is the:
marginal revenue.
A(n) ___________ profit simply indicates that the firm is doing just as well as it would have if it had chosen to use its resources to produce a different product or to compete in a different industry.
normal
Firms that take or accept the market price and have no ability to influence that price are known as
price takers.
Profit equals total __ minus total __.
revenue - cost
The price of a good times the number of units sold gives us
total revenue.
Profit equals ___ revenue minus ___ cost.
total; total
As the market price of a good __________ , all else held constant, a profit-maximizing firm that produces the good can afford to expand its production.
Blank 1: increases, rises, grows, or expands
________________competition is a market structure characterized by the interaction of large numbers of buyers and sellers in which the sellers produce a standardized or homogeneous product.
Perfect
The demand for a perfectly competitive firm's product is a horizontal line originating at the market __________.
Price
Perfect ________________ is a market structure characterized by the interaction of large numbers of buyers and sellers in which the sellers produce a standardized or homogeneous product.
competition
Total revenue minus the implicit and explicit costs of production is __________ profit.
economic
Total revenue minus the implicit and explicit costs of production is ___________ profit.
economic
Zero ___________ profit or normal profit is the revenue needed for a company to break even and meet operating costs without a loss.
economic
Zero ____________ profit is when the firm's revenue equals its economic costs without a loss.
economic
The marginal cost is the:
extra or additional cost associated with the production of an additional unit of output.
The extra or additional cost associated with the production of an additional unit of output is the _____________ cost.
marginal
Marginal revenue is the
additional revenue associated with the sale of an additional unit of output.
Average revenue is the:
amount of revenue per unit of a product sold
The total revenue divided by the number of units of a product sold is the ___________ revenue.
average
In a perfectly competitive market, we assume the product is ____________ (heterogeneous/homogeneous) in the minds of consumers.
homogeneous
The demand for a perfectly competitive firm's product is a ______________ (vertical/horizontal) line originating at the market price.
horizontal