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14 Cards in this Set
- Front
- Back
Competitive Market
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No single buyer or seller has any influence on the market price and that all firms must sell their output at the same market price.
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Fixed Costs
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Costs that do not vary with output.
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Variable Cost
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Costs that do vary with output.
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Total Revenue
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Price times quantity sold: TR = P x Q.
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Total Cost
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The cost of producing a given quantity of output.
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Marginal Revenue (MR)
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The change in total revenue from selling an additional unit of output.
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Marginal Cost (MC)
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The change in total cost from producing an additional unit of output.
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Average Cost
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The per unit cost of production.
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Monopoly Power
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The ability of a firm to raise price above average cost
without fear of other firms entering the market. |
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Natural Monopoly
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Exists when a single firm can supply the entire market at a lower cost than two or more firms.
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Price Discrimination
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Selling the same product at different prices to different customers.
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Perfect Price Discrimination (PPD)
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Each person is charged their maximum willingness to pay.
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Bundling
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A strategy that requires products be purchased together in a bundle or package.
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Tying
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A form of price discrimination in which one good, called the base good, is tied to a second good called the variable good.
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