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perfect competition
chapter 12
Question | Answer |
---|---|
free entry and exit | A situation where there are no restrictions preventing the entry of new firms to the industry or the exit of existing firms |
long-run equilibrium | The combination of price and quantity that gives the firm the highest profit in the long run. |
Price taker | A firm that is unable to influence the market price of its good thus takes this price as given or fixed. |
Profit maximisation | The objective of the firm to produce the level of output that gives th highest possible profit, that is, where MR = MC |
Short-run equilibrium | The combination of price and quantity that gives the firm the highest profit in the short run. |