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 revenue Optimal output rule Price-taking firm’s optimal output rule Marginal revenue curve Break-even price Shut-down price Short-run individual supply curve Industry supply curve Short-run industry supply curve Short-run market equilibrium Long-run market equilibrium Long-run industry supply curve | an economic balance in which, given sufficient time for producers to enter or exit an industry, the quantity supplied equals the quantity demanded. a graphical representation showing how marginal revenue varies as output varies. a graphical representation that shows the relationship between the price of a good and the total output of the industry for that good. an industry in which all producers are price-takers. a graphical representation that shows how an individual producer’s profit-maximizing output quantity depends on the market price, taking fixed cost as given. a graphical representation that shows how quantity supplied responds to price once producers have had time to enter or exit the industry. 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. output of different producers regarded by consumers as the same good; also referred to as a commodity. a market in which all participants are price-takers. 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 graphical representation that shows how the quantity supplied by an industry depends on the market price given a fixed number of producers. 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. output of different producers regarded by consumers as the same good; also referred to as a standardized product. the fraction of the total industry output accounted for by a given producer’s output. 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. 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. |