Important thigns in chap 15 and 14 colander

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Author:
ndumas2
ID:
73974
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Important thigns in chap 15 and 14 colander
Updated:
2011-03-20 02:31:15
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colander
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terms and formulas from pwpt
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  1. Perfectly competitive market
    a market in which economic forces operate unimpeded
  2. 6 conditions for perfectly competitive market to exist
    • both buyers and sellers are price takers
    • the number of firms is large
    • there are no barriers to entry
    • firms products are identical
    • there is complete information
    • selling firms are profit-maximizing entrepreneurial firms
  3. marginal revenue
    the change in total revenue associated with a change in quantity
  4. marginal cost (MC)
    the change in total cost associated with change in quantity
  5. the profit maximizing condition of a competitive firm is
    MR = MC
  6. for a competitive firm MR =
    price P
  7. if MR > MC
    a firm can increase profit by increasing output
  8. if MR< MC
    a firm can increase profit by decreasing its output
  9. Monoply
    a market structure in which one firm makes up the entier market
  10. key differs between monopolist andperfect competitior
    • a monoplistic firms marginal revneu is not its price
    • MR is always < price
    • MR changes as output changes, is not equal to price
  11. Marginal revenue MR
    is the change in total revenue associated with a chang ein quantity
  12. Marginal cost MC
    is the change in total cost associated with a change in quantity
  13. the profit-maximizing condition of a monopolistic firm is
    MR = MC
  14. for monoplist if MR >MC
    the monoply can increase profit by increasing output
  15. the monoply can increase profit by decreasing its output if
    MR < MC

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