Market Structures
This market structure has many firms selling identical products with no control over price.
What is perfect competition?
This business is owned by one person who keeps all profits but also takes all risk.
What is a sole proprietorship?
Costs that do NOT change with production levels.
What are fixed costs?
Profit is maximized when these two values are equal.
What are marginal revenue and marginal cost?
This occurs when markets fail to allocate resources efficiently.
What is market failure?
This structure features many firms selling similar but slightly different products.
What is monopolistic competition?
This business type involves two or more people sharing profits, responsibilities, and risks.
What is a partnership?
Costs that change as production increases or decreases.
What are variable costs?
This is the cost of producing one additional unit.
What is marginal cost?
Costs or benefits that affect third parties are called this.
What are externalities?
This market structure has only a few dominant firms with significant control.
What is an oligopoly?
This business is a separate legal entity owned by shareholders and provides limited liability.
What is a corporation?
The formula: Fixed Costs + Variable Costs = ______.
What is total cost?
This is the additional revenue from selling one more unit.
What is marginal revenue?
Pollution is an example of this type of externality.
What is a negative externality?
This structure exists when one firm controls the entire market.
What is a monopoly?
This business allows individuals to operate under an established brand and system for a fee.
What is a franchise?
This is calculated as price per unit multiplied by quantity sold.
What is total revenue?
According to the shutdown rule, a firm should keep producing as long as losses are less than this.
What are fixed costs?
Government payments that encourage beneficial behavior are called this.
What are subsidies?
In this market structure, firms are known as “price takers.”
What is perfect competition?
A group of investors wants to fund a large tech company. They want to share ownership through stock and avoid being personally responsible for the company’s debts.
What is a corporation?
This is the difference between total revenue and total cost.
What is profit?
In the long run, firms will enter a market when this occurs.
What is profit?
Government rules that limit harmful behavior are called this.
What are regulations?