Unformatted text preview: Average variable cost: total variable cost divided by the number of units output Average total cost: total cost divided by the number of units output Perfect competition: an industry structure in which there are many firms each small relative to the industry producing identical products and in which no firm is large enough to have any control over prices. In perfectly competitive industries new competitors can freely enter and exit the market Homogenous products: undifferentiated products; products that are identical to or indistinguishable from one another Total revenue: the total amount that a firm takes in from the sale of its product: the price per unit times the quantity of output the firms decides to produce Marginal revenue: the additional revenue that a firm takes in when it increases output by one additional unit. In perfect competition, p=mr Chapter 8: Short- Run Cost and Output Decisions Wednesday, September 28, 2011 11:58 AM Econ 2106 Page 1...
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- Fall '06
- Microeconomics, Economics of production, Total Variable Cost