Market Structure - Important features of a market, such as the number of firms, product uniformity across firms, firm’s ease of entry and exit, and forms of competition, Perfect Competition - A market structure with many fully informed buyers and sellers of a standardized product and with no obstacles to entry or exit of firms in the long run, Commodity - A standardized product; a product that does not differ across producers, such as a bushel of wheat or an ounce of gold, Price Taker - A firm that faces a given market price and whose quantity supplied has no effect on that price; a perfectly competitive firm that decides to produce must accept, or “take,” the market price, Marginal Revenue - The firm’s change in total revenue from selling an additional unit; a perfectly competitive firm’s marginal revenue is also the market price, Average revenue - Total revenue divided by quantity, = Total revenue/quantity; in all market structures equals the market price, Short-run industry supply curbe - A curve that indicates the quantity supplied by the industry at each price in the short run; in perfect competition, the horizontal sum of each firm’s short-run supply curve, long-run industry supply curve - A curve that shows the relationship between price and quantity supplied by the industry once firms adjust in the long run to any change in market demand, constant-cost industry - An industry that can expand or contract without affecting the long-run per-unit cost of production; the long-run industry supply curve is horizontal, increasing-cost industry - An industry that faces higher per-unit production costs as industry output expands in the long run; the long-run industry supply curve slopes upward, Productive efficiency - Each firm employs the least-cost combination of inputs; minimum average cost in the long run, Allocative efficiency - Each firm produces the output most preferred by consumers; marginal benefit equals marginal cost, Producer surplus - A bonus for producers in the short run; the amount by which total revenue from production exceeds variable cost, Social Welfare - The overall well-being of people in the economy; maximized when the marginal cost of production equals the marginal benefit to consumers, Golden rule of profit maximization - To maximize profit or minimize loss, a firm produces the quantity at which marginal revenue equals marginal cost; this rule holds for all market structures,

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