ECO 101 Chapter Notes - Chapter 14: Average Variable Cost, Marginal Revenue, Market Power

55 views3 pages
25 Aug 2016
School
Department
Course
Professor

Document Summary

A market is competitive if each buyer and seller is small compared to the size of the market and has little ability to influence market prices. Market power- if a firm can influence the market price of the good it sells. Competitive market- a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker; firms can freely enter or exit the market. When there is free entry and exit in a competitive market, it is powerful force shaping the long- run equilibrium. A firm in a competitive market tries to maximize profit. Average revenue- total revenue divided by the quantity sold. For all types of firms, average revenue equals the price of the good. Marginal revenue- the change in total revenue from an additional unit sold (change in total revenue divided by change in quantity) For competitive firms, marginal revenue equals the price of the good.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related textbook solutions

Related Documents

Related Questions