Competency 3 OA Review C211 Econ

Inputs that are not fixed in the short run.

Inputs that are fixed in the short run.

A period of time where at least one input is fixed

Inputs infrequently utilized.

Inputs that stay the same during a specific short-term.

Those inputs that were set for the short-term period and remain unchanged within the period.

Inputs that are not fixed in the short run.

Inputs that do not change regardless of circumstances.

If implicit costs are positive, economic profit is positive.

If explicit costs are positive, accounting profit is equal to economic profit only if implicit costs are zero.

If explicit costs are positive, economic profit is greater than accounting profit.

Accounting profit only considers explicit costs, while Economic profit takes into account both explicit and implicit costs.

Economic profit is the difference between total revenue and all costs (explicit and implicit).

Consumer prefers bundle E because it lies on a higher indifference curve than other bundles.

Consumer prefers bundle E due to more donuts, implying a preference for more of one good.

Firms in both perfect competition and monopolistic competition have many competitors.

Firms in perfect competition and monopolistic competition do NOT have monopoly power.

Each firm faces a demand curve that slopes downwards, meaning its demand decreases as the price goes up.

Firms in monopolistic competition produce products that are slightly different from each other's products

Perfect competition business model characterized by many competitors.

Monopolistic competition characterized by many competitors.

Inputs that cannot be adjusted in the short run, meaning their quantity remains constant even when output changes.

The period of time where at least one input is fixed. This means you can't change the amount of some resources used.

Inputs that can be adjusted in the short run, meaning you can change the amount used as output changes.

In the short run, total cost isn't always the same as variable cost because fixed costs exist. Total cost includes both fixed and variable costs, while variable cost only includes the costs of inputs that can be changed.

Mergers can decrease competition by reducing the number of businesses in a market, giving the merged entity more control over prices and output.

Mergers don't always affect production costs. It depends on the specifics of the companies involved.

When fewer businesses compete in a market, consumers have fewer choices and may face higher prices.

Changes in output in the short run only affect variable costs because fixed costs remain the same.

The additional revenue generated by selling one more unit of output.

The additional cost incurred by producing one more unit of output.

When a competitive firm sells an additional unit of output, its revenue increases by an amount less than the price of the unit.

In a competitive market, the price of a good is determined by market forces beyond the control of a single firm. When a competitive firm sells additional units, it must lower its price to attract additional buyers, thus decreasing its marginal revenue.

A firm that cannot influence the market price of its good, it must accept the price determined by the market.

Firms aim to produce the quantity of output that maximizes their profit.

The output level where the difference between total revenue and total cost is the largest.

The firm has reached its profit-maximizing output level.

A market structure characterized by many firms selling differentiated products, with easy entry and exit, and where each firm has some control over its price.

A market structure dominated by a few large firms, with significant barriers to entry, and where firms are interdependent in their pricing and output decisions.

The process of creating a perceived difference between a firm's product and its competitors' products, based on factors like functionality, design, quality, or branding.

Obstacles or restrictions that prevent new firms from entering a market easily, such as high start-up costs, government regulations, or established brand loyalty.

The situation where firms in an oligopoly are highly aware of each other's actions and pricing strategies, knowing that their own decisions will impact the market and their competitors.

A group of firms in an oligopoly that collude to restrict output and raise prices, acting essentially like a monopoly.

A limit imposed on the output of a particular product, often used by cartels to control supply and maintain high prices.

In monopolistic competition, the price of output is determined by the individual firm's demand curve, which is downward sloping due to product differentiation.