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Flashcards in 3 Exam Deck (10)
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1

What is MC?

cost of producing one more unit

2

What is ATV?

all costs incurred by the firm divided by quantity

3

What is AVC

costs that change with quantity (variable costs) divided by quantity

4

What intersects both ATC and AVC at their minimum point

The MC

5

Distance between ATC and AVC (which is AFC) gets smaller as what gets bigger?

Quantity Gets Bigger

 

6

perfectly competitive market

A market with many sellers and buyers of a homogeneous product and no barriers to entry.

7

firms are price takers

A buyer or seller that takes the market price as given.

8

How is profit maxized when

MR=MC

9

Economic Profit

•profit above and beyond the next best industry

10

Negative Economic Profit: When  price intersects MC below the ATC curve