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Perfect Competitor
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when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barrier, buyers have perfect or full information, and companies cannot determine prices
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Barriers to Entry
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factors that can prevent or impede newcomers into a market or industry sector, and so limit competition
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Allocative Efficiency
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a property of an efficient market whereby all goods and services are optimally distributed among buyers in an economy
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Productive Efficiency
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a level at which an economy or entity can no longer produce additional amounts of a good without lowering the production level of another product
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Economies of scale
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quantity of output goes up, the cost per unit goes down
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Diseconomies of scale
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the cost disadvantages that economic actors accrue due to an increase in organizational size or in output
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constant returns to scale
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inputs (capital and labour) cause the same proportional increase in output
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Total Fixed Cost (TFC)
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all costs of production that do not vary with the level of output
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Total Variable Cost (TVC)
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All costs that change when output changes such as workers
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Total Cost (TC)
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TVC+TFC
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Average Fixed Cost (AFC)
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TFC/Q
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Average Variable Cost (AVC)
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TVC/Q
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Average Total Cost (ATC)
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TC/Q
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Marginal Cost (MC)
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change in TC/change in Q
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