Perfect Competition
Average variable cost is a component of this.
What is average total cost?
When MR=MC,
What is max. profit?
This model can be used to show actual growth and potential growth.
What is the production possibilities curve? (PPC)
When a change in the price of a good results in larger proportional change in quantity demanded.
What is elastic PED?
Imposing a fee to producers offsets this.
When MR=MC,
What is allocative efficiency?
When MC=D,
What is allocative efficiency?
A government intervention that shifts the supply curve to the right.
What is indirect tax?
Substitue goods, degree of necessity, proportion of income spent.
What are price determinants of PED?
This product or service tends to result in poor outcomes to third parties.
What is a demerit good?
Firms in perfect competition can make this in the short run.
What is economic profit?
Being able to set the market price.
What is market power?
This inefficiency can occur due to government intervention.
What is welfare loss?
These goods tend to increase in quantity demanded as income decreases.
What are inferior goods?
This type of policy is designed for public goods.
What is direct provision?
When a firm is operating at the lowest possible cost,
What is productive efficiency?
Controlling the access to resources.
What are barriers of entry?
This mechanism is often used to protect industry.
What is a price floor?
This determinant tends to result in inelastic PES in the very short term.
What is time?
Being able to stop people from using something.
What is excludable?
If a firm doesn't meet these costs they will have economic losses.
What are fixed costs?
In certain industries this is a response to pressure to innovate.
What is research and development?
Subsidy payments to firms tend to increase this.
What is producer surplus?
Most primary commodities tend to exhibit this.
What is inelastic PES?
This type of charge offsets pollution by charging firms to based on their production.
What are tradeable permits?