Econ Hw #11 perfect competition
___ profit creates an incentive for other perfectly competitive firms to enter the market
economic
zero __ profit or normal profit is the revenue needed for a companys to break even and meet operating costs without loss
economic
all firms maximize profits by producing the quantity of output at which the marginal __ is equal to the marginal ___
revenue; cost
profit equals ___ minus average total ___ multiplied by output
revenue; cost
average revenue is the
amount of revenue per unit of a product sold
if the market price is below the average variable cost, the business is not bringing in enough revenue to compensate for the ____ costs
variable
total revenue the __ and __ costs of production is economic profit
explicit; implicit
find the new market supply by __ the short-run supply curves for all the firms in the market
adding
the perfectly competitive model is the most efficient type of market and is characterized by both
allocative; productive
total revenue divided by the number of units of product sold __ revenue
average
for a perfectly competitive firm, the market price is equal to
demand; marginal revenue; average revenue
in decreasing-cost industries, the cost of production falls with expanded output, and the ling-run market supply curves slopes
downward
in a constant-cost industry, the long-run supply curve is a __line originating at the market price that generates __ profits for the firms in the industry
flat; normal
the two conditions that guarantee consumers will enjoy the lowest prices possible are
individual firms being price takers; every firm producing the exact same product
when the total revenue is __ than the total cost, the level of profit that occurs is a loss
less
when the total revenue earned by a firm is less than the total cost of production the firm faces a __
loss
in the presence of __ firms exit until the market reaches the point at which the firms are generating a __profit; then exit stops, and the market settles down into its __-run equilibium
losses; normal;long
as the market price decreases, all else held constant, a profit-maximizing firm can ____ its production
lower
extra or additional revenue with the production of an additional unit of output is the __ revenue
marginal
a firms short-run supply curve is the portion of the ___ cost curve that is at or above the minimum point of the average ___ cost curve
marginal; variable
in the short run, as the __ rise, so does the level of output supplied
price
the long-run curve represents the long-run relationship between the __ and the ___ supplied
price, quantity
___ efficiency is producing output at the lowest possible average total cost of production
productive
profit equals ___ revenue minus __ cost
revenue; total
in a perfectly competitive market, the price the firm should charge is the market price because the firm is a price __
taker