Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
Standardized product Long-run market equilibrium Long-run industry supply curve Price-taking consumer Free entry and exit Marginal revenue curve Short-run individual supply curve Price-taking firm’s optimal output rule Perfectly competitive market Commodity Market share Optimal output rule Shut-down price Short-run industry supply curve Perfectly competitive industry Break-even price Price-taking producer Industry supply curve Short-run market equilibrium Marginal revenue | a graphical representation that shows the relationship between the price of a good and the total output supplied by the industry for that good. the principle that profit is maximized by producing the quantity of output at which the marginal revenue of the last unit produced is equal to its marginal cost. a graphical representation showing how marginal revenue varies as output varies. an industry in which all producers are price-takers. output of different producers regarded by consumers as the same good; also referred to as a commodity. a graphical representation that shows how the quantity supplied by an industry depends on the market price given a fixed number of producers. output of different producers regarded by consumers as the same good; also referred to as a standardized product. a producer whose actions have no effect on the market price of the good or service it sells. the principle that the profit of a price-taking firm is maximized by producing the quantity of output at which the market price is equal to the marginal cost of the last unit produced. describes an industry that potential producers can easily enter or current producers can leave. the change in total revenue generated by an additional unit of output. the fraction of the total industry output accounted for by a given producer’s output. an economic balance in which, given sufficient time for producers to enter or exit an industry, the quantity supplied equals the quantity demanded. the market price at which a firm earns zero profits. a consumer whose actions have no effect on the market price of the good or service he or she buys. a graphical representation that shows how an individual producer’s profit-maximizing output quantity depends on the market price, taking fixed cost as given. an economic balance that results when the quantity supplied equals the quantity demanded, taking the number of producers as given. the price at which a firm ceases production in the short run because the market price has fallen below the minimum average variable cost. a market in which all participants are price-takers. a graphical representation that shows how quantity supplied responds to price once producers have had time to enter or exit the industry. |