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Short run perfectly competitive equilibrium
answer
The market price and quantity at which quantity demanded equals quantity supplied in the short run.
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Long run perfectly competitive equilibrium
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he market price and quantity at which supply equals demand, established firms have no incentive to exit the industry, and prospective firms have no incentive to enter the industry.
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Constant cost industry
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An industry in which the increase or decrease of industry output does not affect the prices of inputs.
output doesnt affect inputs
output doesnt affect inputs
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Economic rent
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The economic return that is attributable to productive inputs whose supply is fixed or scarce.
economic return on scarce/fixed products
economic return on scarce/fixed products
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Homogeneous product oligopoly
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A market in which a small number of firms sell products that are considered virtually identical by consumers.
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Monopolistic competition
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Describes a market in which many firms compete but the firms produce (horizontally) differentiated products.
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General equilibrium analysis
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An analysis that determines the equilibrium prices and quantities in more than one market simultaneously.
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Economically efficient allocation
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An allocation of goods and inputs in an economy where there is no alternative feasible allocation of goods and inputs that would make some consumers better off without hurting other consumers.
no other allocation that wouldnt hurt others
no other allocation that wouldnt hurt others
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Expected utility
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The expected value of the utility levels that the decision maker receives from the payoffs in a lottery.
expected value....with pay offs in lottery
expected value....with pay offs in lottery
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Risk averse
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A characteristic of a decision maker who prefers a sure thing to a lottery of equal expected value.
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Adverse selection
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Asymmetric information where one party has hidden information about facts or states of the world.
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Externality
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An impact from an economic transaction on a third party who did not choose to incur it.
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Non-rival good
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A good whose consumption by one person does not reduce the quantity that can be consumed by others.
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Excludable good
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A good to which non-paying consumers can be denied access.
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Public good:
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A good that is non-rival and non-excludable.
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