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LONG-RUN EQUILIBRIUM, MONOPOLISTIC COMPETITION: Relative freedom of entry and exit ensures that, in the long run, every firm in a monopolistically competitive industry earns exactly a normal profit, receiving neither an economic profit, nor incurring an economic loss. This result is achieved because entry and exit affects the market supply curve, which affects the overall market price, each firm's demand curve, and the range or prices it can charge. Each firm's demand curve adjusts until the profit-maximizing price is exactly equal to average total cost (both short run and long run).
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MARGINAL REVENUE CURVE, PERFECT COMPETITION A curve that graphically represents the relation between the marginal revenue received by a perfectly competitive firm for selling its output and the quantity of output sold. Because a perfectly competitive firm is a price taker and faces a horizontal demand curve, its marginal revenue curve is also horizontal and coincides with its average revenue (and demand) curve. A perfectly competitive firm maximizes profit by producing the quantity of output found at the intersection of the marginal revenue curve and marginal cost curve.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time lost in your local discount super center seeking to buy either a rechargeable battery for your camera or a coffee cup commemorating the first day of spring. Be on the lookout for a thesaurus filled with typos.
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This isn't me! What am I?
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Al Capone's business card said he was a used furniture dealer.
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"He who has a „why¾ to live can bear with almost any „how."" -- Friedrich Nietzsche, Philosopher
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QJE
Quarterly Journal of Economics
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