Perfect Competition Flashcards
1
Q
Marginal Revenue
A
The change in total revenue that occurs as a result of a unit change in sales
2
Q
Shutdown condition
A
If price falls below the minimum of AVC, the firm should shut down in the short run.
3
Q
Break even point
A
The lowest price at which the firm will not suffer negative economic profit
4
Q
Allocative efficiency
A
A condition in which all possible gains from an exchange are realized
5
Q
Pecuniary diseconomy
A
An increase in production costs that occurs when a rise in production output leads to an increase in the prices of inputs
6
Q
Price elasticity of Supply
A
The percentage change in the quantity supplied that occurs in response to a unit percentage change in product price
