There are many small firms, each producing an identical product and each too small to affect the market price.

faces a completely horizontal demand (or dd) curve

the extra revenue gained from each extra unit sold is therefore

a firm will............. when it produces at that level where marginal cost equals price.

the level of price, at which the firm breaks-even, covering all costs but earning zero-profit

revenue= ?

Losses=?

when revenues just cover variable costs or where losses are equal to fixed costs

when the price falls below average variable costs.

Any change in outputs must use the same fixed amount of the factor production

when capital and all other factors are variable and there are free entry and exit of firms from the industries.

when they are newly formed or when an existing firm decides to move into a new sector.

when they stop producing because the line is unprofitable and can produce that the firms go bankrupt when it can´t pay bills

when there are no barriers to entry or exit, such as government regulations or intellectual propoerty rights as
patents and softward.

is the price equals marginal cost equals the minimum long-run average cost for each identical firm

Increase in demand for the commodity will raise the price of the commodity

An increase in supply of commodity will generally lower the price and increase the quantity bought and sold

it is when you can increase the annual outputs of a product by adding more labor to each acre of land

will operate if variable factor of production are added to fixed amounts of factors such as land

the payment for the use of such a factor of production when the quantity supplied is constant at every price

if the supply decrease

if the supply increase

the market is ------------ when it provides its consumers with the most desirable set of goods and services, given the resources and technology of the economy

occurs when no possible reorganization of production can make anyone better off without making someone else worse off.

is the balancing of supply and demand in a market or economy characterized by perfect competition

the difference between that amount that a consumer would be willing to pay for a commodity and the amount actually paid

the difference between the producer sales revenue and the producer's costs, its measured the area above the supply curve but under the price line up to the amount sold

when a firm has market power in a particular market (monopoly). the firm can raise the price of its product above its marginal costs

they arise when some of the side effects of production or consumption are not included in the market price

the invisible-hand theory that assumes that buyers and seller have complete information about the goods and services they buy or sell

prevails in an industry whenever individual sellers can affect the price of their output

the major kinds of imperfect competition are

Imperfect competitors are

a single seller with the complete control over an industru

Means "Few sellers". each individual firm can affect the market price
example; car makers

a large number of sellers produce differentiated products.

is a market in which the industry´s outputs can´t efficiently produce by several firms

are factors that make it hard for new firms to enter an industry.

an industry may have few firms and limited pressure to compete, is when

Governments sometimes restrict competition in certain industries, include patents, entry restrictions.

advertising can create product awareness and loyalty to well- known brands

the monopolistic practices lead to high prices ad low outputs and therefore reduce consumer welfare.

the conditions of maximization in perfect competition

The conditions of maximization in monopoly

Is the change in revenue that is generated by an additional unit of sales.

what is the relation between the price elasticity of demand and marginal revenue?

will occur when outputs are at the level where the firm's marginal revenue when is equal to his marginal cost

monopoly equilibrium is also called

a monopolistic will maximize its profits by setting output at the lever where

The marginal principle

Means that the people will maximize their incomes or profits or satisfaction by counting only the marginal costs and marginal benefits of a decision