A catfish farmer will shut down production when
Price falls below AFC
A firm experiencing economic losses will still continue to produce output in the short run as long as
Price is above average variable cost
A firms total revenue can be determined by
Price times quantity
A monopoly occurs when
There is only one producer of a good or service
A perfectly competitive firm is a price taker because
The price of the product is produced by many buyers and sellers
A profit maximizing producer seeks to
maximize total profit
Economic profit is
Less than accounting profit by the amount of implicit costs
Entrepreneurship
can result in economic losses
Examples of barriers to entry include
Patents
Explicit costs
Are the sum of actual monetary payments made for resources used to produce a good
, fixed costs
are constant in the short run
For perfectly competitive firms, price
is equal to marginal revenue
For the perfectly competitive firm, the marginal revenue is always
constant
High profits in a particular industry indicate that
consumers want more of that industry's goods
If someone invents a better way to invent frozen pizzas, then
The market supply curve for frozen pizzas will shift to the right
If the price of ricotta cheese, an ingredient in lasagna, increases, then
The market supply curve for lasagna will shift to the left
If the products of two firms are homogeneous, then they
Are perfect substitutes
Implicit costs
Are the costs to produce a good or service for which no direct payment is made
In a perfectly competitive industry, economic profit
Will approach zero in the long run as more firms enter the market
In a perfectly competitive industry, economic profit
Price falls below AFC
A firm experiencing economic losses will still continue to produce output in the short run as long as
Price is above average variable cost
A firms total revenue can be determined by
Price times quantity
A monopoly occurs when
There is only one producer of a good or service
A perfectly competitive firm is a price taker because
The price of the product is produced by many buyers and sellers
A profit maximizing producer seeks to
maximize total profit
Economic profit is
Less than accounting profit by the amount of implicit costs
Entrepreneurship
can result in economic losses
Examples of barriers to entry include
Patents
Explicit costs
Are the sum of actual monetary payments made for resources used to produce a good
, fixed costs
are constant in the short run
For perfectly competitive firms, price
is equal to marginal revenue
For the perfectly competitive firm, the marginal revenue is always
constant
High profits in a particular industry indicate that
consumers want more of that industry's goods
If someone invents a better way to invent frozen pizzas, then
The market supply curve for frozen pizzas will shift to the right
If the price of ricotta cheese, an ingredient in lasagna, increases, then
The market supply curve for lasagna will shift to the left
If the products of two firms are homogeneous, then they
Are perfect substitutes
Implicit costs
Are the costs to produce a good or service for which no direct payment is made
In a perfectly competitive industry, economic profit
Will approach zero in the long run as more firms enter the market
In a perfectly competitive industry, economic profit
