Economics Chapter 5 Quiz

A firm's ability to influence the price of a product, depending on the availability of substitutes.

The total revenue divided by the total product.

The change in total revenue divided by the change in total product.

The output level where marginal revenue (MR) equals marginal cost (MC).

The level of output where price (average revenue) equals average cost.

A market structure where a single firm controls the entire market, allowing them to influence prices.

A market structure with few firms, each with significant market power and influence over price.

The maximum profit a firm seeks to earn, covering both explicit (tangible) and implicit (opportunity) costs.

A measure of a company's profitability, calculated by dividing total revenue by total expenses.

A situation where a firm can increase its price without significantly impacting quantity demanded, creating a kink in the demand curve.

In a monopoly, the firm can produce the quantity of output where the difference between total revenue and total cost is maximized, and charge the highest price consumers are willing to pay. This is also known as the profit-maximizing output level.

A kinked demand curve is a characteristic of oligopolies, where firms are hesitant to lower prices due to the fear of price wars, but also hesitant to raise prices for fear of losing customers to competitors.

A law that prohibits anti-competitive practices and promotes fair competition in the market. It aims to prevent monopolies, price fixing, and other practices that harm consumers.

Combining two companies in the same industry, like rivals, into one.

A formula used to measure the market power of a few key players. It adds up the sales of the top four companies in an industry and compares it to the total industry sales.

Combining a company with its supplier, giving control over resources.

Large companies thrive due to lower costs per unit produced, giving them an advantage.

Businesses in different industries combine during tough economic times.