Perfect Competition

the level of profit that occurs when total revenue is equal to total cost is known as _____ profit

normal

total revenue minus the ___ and ____ costs of production is economic profit

Explicit and implicit

in a perfectly competitive market, homogeneity means that firms must charge the market price for the goods or services they produce, because

There are hundreds of other perfectly god substitues and the market is competitive

marginal revenue is the

additional revenue associated with the sale of an additional unit

by responding to changes in market price, competitive firms produce more of the products we value most and fewer of the products we value least, thereby achieving

allocative efficiency

average revenue is the

amount of revenue per unit of a product sold

profit equals_____ revenue minus_____ cost multiplied by output

average and average

in a perfectly competitive market, we assume the product is identical in the minds of

consumers

when consumers are relatively sensitive to changes in price

demand is considered elastic

as the market priec decreases, all else held constant, a profit-maximizing firm can_____ its prodction

lower

for a perfectly competitive firm, the market price is eual to

marginal revenue, average revenue, demand

a perfectly competitive firm shoul produce output until marginal ____ equals marginal___

revenue and cost

in the ____ run , when at least one input is fixed, as the price rises, so does the level of output supplied

short

if the market price is below the average variable cost, the business is not bringing in enough revenue to compensate for the ____ cost

variable

the short run supply curve starts at the minimum average ___ cost

variable

zero___ profit or normal profit is the revenue needed for a company to break even and meet opperating costs without a loss

economic

the demand for a perfectly competitive firm's product is a _____ line originating at the market price

horizontal