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.
Price-taking producer Price-taking consumer Perfectly competitive market Perfectly competitive industry Market share Standardized product Commodity Free entry and exit Marginal benefit Principle of marginal analysis Marginal revenue Optimal output rule Price-taking firm’s optimal output rule Marginal revenue curve Economic profit Accounting profit Break-even price Shut-down price Sunk cost Short-run individual supply curve Industry supply curve Short-run market equilibrium Long-run market equilibrium Long-run industry supply curve Explicit cost Implicit cost | a cost that involves actually laying out money a cost that does not require the outlay of money; it is measured by the value, in dollar terms, of forgone benefits a cost that has already been incurred and is not recoverable 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 business’s revenue minus the opportunity cost of resources; usually less than the accounting profit. a graphical representation showing how marginal revenue varies as output varies the change in total revenue generated by an additional unit of output the market price at which a firm earns zero profits the additional benefit derived from producing one more unit of a good or service the fraction of the total industry output accounted for by a given producer’s output the proposition that the optimal quantity is the quantity at which marginal benefit is equal to marginal cost. a business’s revenue minus the explicit cost and depreciation; usually larger than economic profit a market in which all participants are pricetakers a consumer whose actions have no effect on the market price of the good or service he or she buys output of different producers regarded by consumers as the same good; also referred to as a commodity. 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 industry in which all producers are pricetakers output of different producers regarded by consumers as the same good; also referred to as a standardized product. 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 a graphical representation that shows the relationship between the price of a good and the total output of the industry for that good 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 producer whose actions have no effect on the market price of the good or service it sells an economic balance that results when the quantity supplied equals the quantity demanded, taking the number of producers as given an economic balance in which, given sufficient time for producers to enter or exit an industry, the quantity supplied equals the quantity demanded. describes an industry that potential producers can easily enter or current producers can easily leave a graphical representation that shows how quantity supplied responds to price once producers have had time to enter or exit the industry |
Price-taking producer, p. 210
Price-taking consumer, p. 210
Perfectly competitive market, p. 210
Perfectly competitive industry, p. 210
Market share, p. 211
Standardized product, p. 211
Commodity, p. 211
Free entry and exit, p. 211
Marginal benefit, p. 214
Principle of marginal analysis, p. 214
Marginal revenue, p. 214
Optimal output rule, p. 214
Price-taking firm’s optimal output rule, p. 214
Marginal revenue curve, p. 215
Economic profit, p. 216
Explicit cost, p. 216
Implicit cost, p. 216
Accounting profit, p. 216
Break-even price, p. 219
Shut-down price, p. 221
Sunk cost, p. 221
Short-run individual supply curve, p. 221
Industry supply curve, p. 224
Short-run industry supply curve, p. 225
Short-run market equilibrium, p. 225
Long-run market equilibrium, p. 227
Long-run industry supply curve, p. 228