7/29/2019 Chapter 23 Perfect Competition

1/1

1. Market Structure:All features of a market that effect the

behavior and performance of the firms

2. Things in a market structure: number of sellers, information,

entry barriers, product differentiation

3. Market structure is important because it...: Predicts

beavhior, output, efficiency

4. Market Power:When a firm can influence the price of the

product

5. In a competitive market a firm will have: little or no power

6. In a non competitive market a firm will have: a lot of power

7. In perfect competition a firm has: no effect on market price

8. Price taker: a firm must get a product at a certain price because it

doesn't have a choice

9. A perfect competitior has (4 things): large number of

buyers/sellers, a homogenous product, FULL acess to price

information, no barriers to enter or exit

10. Free entry means that: nothing stands in your way when youwant to enter the market

11. The demand curve of the perfect competitor is: perfect

elastic (horozontial)

12. If a firm _____ the price is sells nothings: Raises

13. If a firm _______ the price it earns less profit: Lowers

14. The competitive price is set where the: Demand and supply

curve intersect

15. Profit=: Total revenues - Total costs

16. The firm chooses the _____ while the market chooses

the ______: Quantity, price

17. Find optimal profit (profit maximization) where:

Marginal costs equals marginal revenue

18. Marginal revenue equals _____ in a perfectly

competitive firm: Price

19. Price=___=____: Marginal Revenue, Marginal Costs

20. Number of units sold (Q) X Average proit per unit =:

Profits

21.When a firm's owners sell the assets it....: Goes out of

business

22.When a firm produces at q=0: it shuts down, but still in

business23. The short run break-even price is when Price=: minimum

average total costs

24. Short Run- Positive economic profits occur when price

is ______ than ______: greater, average total costs

25. Short Run- Negative economic profits occur when price

is _______ than _______: less, average total costs

26. Short Run- If price is less than minimum average

variable costs: shut down will occur

27. Short Run- If minimum average variable costs is less

than price which is less than minimum average total

costs then....: q>0 but have economic losses

28. Short Run-Even when economic profits are zero:you can

still have positive accounting profits

29. Short run supply curve should look like _____ and be

above _______: Marginal costs, average variable costs

30. Long Run- Economic profits tell new firms: to enter the

market

31. Long run- economic losses tell exsisting firms to: exit the

market

32. Long run- Firms make _____ profits at equilribrium:

Zero

33. Long run- First enter and exit the industry because of:

profit opportunities

34. Long run- if economic profits are positive (three

things): 1) firms will enter

2) Supply inceases

3) Price falls until profits are 0

35. Long run- if economic profits are negative (three

things): 1) firms will exit

2) supple decreases

3) Price rises until profits are 0

36. Long run- The firm ___ change the scale of its plant: can

37. Long run-

Price=______=_______=_______=________:

Marginal revenue, marginal cost, short run minimum average

costs, long run minimum average cost

38. Marginal Cost pricing: Price charged is equal to the

opportunity cost of the last unit produced (P=MC)

39.Allocative Efficiency: Marginal value equals the marginal

costs

"Just the right amount"

40.Allocative Inefficiency: Created DWL, p could be greater than

marginal cost

ECON 102 Final- Chapter 23: Perfect ConsumptionStudy online at quizlet.com/_aj8qx