Economics · Ch 4 — The Theory of the Firm under Perfect Competition
Key Concepts
Key Concepts
The key terms introduced in this chapter, gathered in one place for quick revision — a compact glossary for this CBSE Class …
A market structure with a large number of buyers and sellers trading a homogeneous product, with free entry and exit and perfect information — features under which …
The receipts a firm earns from selling its output. Total revenue is price × quantity; average revenue is revenue per unit (equal to price for a competitive firm); marginal revenue is the addition to total …
The difference between a firm's total revenue and its total cost of production, — the firm's earnings net of costs, which it is assumed to try …
The firm's objective of choosing the output that yields the greatest profit. For a perfectly competitive firm this requires price to equal marginal cost, with marginal cost non-decreasing and price at least cove …
The curve showing the output a firm chooses to produce at each market price. It is the rising part of the marginal cost curve from and above the minimum AVC (short run) or minimum LRAC (long run), and zero …
The curve showing the total output that all firms in the market produce together at each price, obtained by the horizontal summation of the indivi …
A pure number measuring the responsiveness of quantity supplied to a change in price, equal to the percentage change in quantity supplied divided by the …