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market structure
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characteristics of an industry that define the likely behavior of firms. pure competition, monopoly, monopolistic competition, and oligopoly.
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pure competetion
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very large number of firms production a standardized product. new firms enter/exit easily
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pure monopoly
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market structure one firm is the sole seller or product/service
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monopolistic ocmpetition
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relatively large number of sellers producing differentiated products. non price competition, firm doesn't try to distinguish product on basis of price but attributes like design. entry/exit easy
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oligopoly
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only a few sellers of a standardized product,e act firm is effected by decisions of rivals and must take those decisions into account.
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imperfect competition
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all market structures except pure competition; monopoly, monopolistic competition, and oligopoly.
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price take
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cannot change market price; just adjust to it
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average revenue
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total revenue from the sale of a product divided by the quantity of the product sold; equal to the price when all units are sold at same price
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marginal revenue
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change in total revenue that results from selling one more unit or output
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break even point
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an output at which a firm makes a normal profit but not an economic profit
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mr= mc rule
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principle a firm will maximize profit
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