Market Structures
This market structure has many firms selling identical products
What is perfect competition
When demand increases, this happens to equilibrium price
What is price increases
This type of profit includes both explicit and implicit costs
What is economic profit
This is the cost of producing one more unit
What is marginal cost
This occurs when no player can benefit from changing their strategy alone
What is a Nash equilibrium
These two characteristics determine market structure
What are number of firms and product differentiation
This measures how responsive quantity is to price changes
What is elasticity
These are direct, out-of-pocket business expenses
What are explicit costs
This law states output eventually increases at a decreasing rate
What is the law of diminishing marginal returns
Firms hire workers until this equals the wage rate
What is MRP (or MRP = wage)
This type of competition includes monopoly, oligopoly, and monopolistic competition
What is imperfect competition
If demand is inelastic, raising price will do this to total revenue
What is increase total revenue
This type of cost changes with output
What is variable cost
This is the additional output from one more worker
What is marginal product
This is a labor market with only one employer
What is a monopsony
These are two characteristics of an oligopoly
What are few firms and high barriers to entry?
This type of good sees demand rise when income increases
What is a normal good
This is calculated by dividing total cost by quantity
What is average total cost
As more workers are hired, this causes MRP to fall
What is diminishing marginal returns
This happens when workers with the same skill are paid differently
What is wage discrimination
In monopolistic competition, profits become zero in the long run because of this
What is new firms entering the market
This causes supply to shift left
What is higher production costs
This includes the opportunity cost of owned resources
What are implicit costs
This is the formula for marginal product
What is change in total product divided by change in labor
This curve lies above labor supply in a monopsony because wages must rise for all workers
What is MFC (marginal factor cost)