clicker questions Flashcards
If a perfectly competitive industry is in long-run equilibrium, the price of the product equals the
minimum of average total cost. This is called Zero Profit Condition (profit = PQ-PATC = 0).
For a monopolist, the price of the product
exceeds the marginal revenue
The U shape of the average total cost curve is because
average productivity
rises and then falls.
A monopolist will always produce at the
elastic part of the demand curve.
MR>0:
selling one more unit increases revenue
MR=0:
selling one more unit does not change revenue
MR<0:
selling one more unit decreases revenue
TR == what is it
= PQ
E = what is it
(%△Q)/(%△P)
what does AVC and FC tell us about
(AVC tells us about the shut down point and FC tells us about spreading the overhead
what does AFC and AC tell us about
(AFC tells us about about spreading the overhead and AC tells us about total cost)
What does AC tell us about and MC tell us about
AC tells us about profit(or loss) and MC tells us about supply*
where does AVC and AC interesect MC
AVC and AC intersect MC at the low points of the AVC and AC curves
From the perspective of the economy in which the firm operates, what is the economic logic of
having a patent system?
it innoative people to invest creaate something new
