Profit (economics)
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Profit (economics)
An economic profit is the difference between the revenue a commercial entity has received from its outputs and the opportunity cost In microeconomic theory Microeconomics (from Greek prefix ''mikro-'' meaning "small" + ''economics'') is a branch of economics Economics () is the social science that studies how people interact with value; in particular, the Produ ...s of its inputs. Unlike an accounting profit Profit, in accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic entities such as businesses and corporations. Accounting, which has ..., an economic profit takes into account both a firm A company, abbreviated as co., is a legal entity In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surro ...'s ...
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Economics
Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Within mainstream economics, microeconomics is a field which analyzes what's viewed as basic elements in the economy, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies that have impact on glossary of economics, these elements. Other broad distinctions within economics in ...
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Market (economics)
A market is a composition of system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by its boundaries, structure and purp ...s, institution Institutions, according to Samuel P. Huntington Samuel Phillips Huntington (April 18, 1927 – December 24, 2008) was an American political scientist, adviser and academic. He spent more than half a century at Harvard University Ha ...s, procedures, social relation In social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant life and a branch of biology. A botan ...s or infrastructure Infrastructure is the set of fundamental facilities and systems that support the sustainable functionality of households and firms. ...
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Monopolistic Competition
Monopolistic competition is a type of imperfect competitionIn economics, imperfect competition refers to a situation where the characteristics of an economic market do not fulfil all the necessary conditions of a perfectly competitive market, resulting in market failure. The structure of a market can sign ... such that there are many producers competing against each other, but selling products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes. In monopolistic competition, a firm takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other firms. If this happens in the presence of coercive government, monopolistic competition will fall into government-granted monopoly In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, an ...
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Economic Equilibrium
In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant life and a bran ..., economic equilibrium is a situation in which economic forces such as supply and demand In microeconomics Microeconomics is a branch of that studies the behavior of individuals and in making decisions regarding the allocation of and the interactions among these individuals and firms. Microeconomics focuses on the study ... are balanced and in the absence of external influences the (equilibrium List of types of equilibrium, the condition of a system in which all competing influences are balanced, in a wide variety of contexts. Equilibrium may also refer to: Film and television * Equilibrium (film), ''Equilibrium'' (film), a 2002 scien ...) values of economic variables will not change. For example, ...
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Long Run
In economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ..., the long-run is a theoretical concept in which all markets are in equilibrium List of types of equilibrium, the condition of a system in which all competing influences are balanced, in a wide variety of contexts. Equilibrium may also refer to: Film and television * Equilibrium (film), ''Equilibrium'' (film), a 2002 scien ..., and all prices and quantities have fully adjusted and are in equilibrium. The long-run contrasts with the short-run, in which there are some constraints and markets are not fully in equilibrium. More specifically, in microeconomics Microeconomics is a branch of mainstream economics Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities ...
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Perfect Competition
In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant life and a bran ..., specifically general equilibrium theory In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an ove ..., a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In theoretical models where conditions of perfect competition hold, it has been demonstrated that a market Market may refer to: *Market (economics) *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an island shared by Finla ...
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Perfect Competition In The Short Run (simple)
Perfect commonly refers to: * Perfection, a philosophical concept * Perfect (grammar), a grammatical category in certain languages Perfect may also refer to: Film * Perfect (1985 film), ''Perfect'' (1985 film), a romantic drama * Perfect (2018 film), ''Perfect'' (2018 film), a science fiction thriller Literature * Perfect (Friend novel), ''Perfect'' (Friend novel), a 2004 novel by Natasha Friend * Perfect (Hopkins novel), ''Perfect'' (Hopkins novel), a young adult novel by Ellen Hopkins * Perfect (Joyce novel), ''Perfect'' (Joyce novel), a 2013 novel by Rachel Joyce * Perfect (Shepard novel), ''Perfect'' (Shepard novel), a Pretty Little Liars novel by Sara Shepard * ''Perfect'', a young adult science fiction novel by Dyan Sheldon Music * Perfect interval, in music theory * Perfect Records, a record label Artists * Perfect (musician) (born 1980), reggae singer * Perfect (Polish band) * Perfect (American band), an American alternative rock group Albums * Perfect (Intwine alb ...
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Industry (economics)
In macroeconomics Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred ..., an industry is a branch of an economy An economy (; ) is an area of the production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products ... that produces a closely-related set of raw material A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished Product (business), products, energy, or intermediate materials that are feedstock for future finis ...s, goods In economics Economics () is a social science Social science is the branch A branch ( ...
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Economic Equilibrium
In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant life and a bran ..., economic equilibrium is a situation in which economic forces such as supply and demand In microeconomics Microeconomics is a branch of that studies the behavior of individuals and in making decisions regarding the allocation of and the interactions among these individuals and firms. Microeconomics focuses on the study ... are balanced and in the absence of external influences the (equilibrium List of types of equilibrium, the condition of a system in which all competing influences are balanced, in a wide variety of contexts. Equilibrium may also refer to: Film and television * Equilibrium (film), ''Equilibrium'' (film), a 2002 scien ...) values of economic variables will not change. For example, ...
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Perfect Competition
In economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ..., specifically general equilibrium theory In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an ov ..., a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In theoretical models where conditions of perfect competition hold, it has been demonstrated that a market Market may refer to: *Market (economics) *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an island shared by Finla ...
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Price Taker
In economics, market power refers to the ability of a theory of the firm, firm to influence the price at which it sells a product or service to increase economic profit. In other words, market power occurs if a firm does not face a perfectly elastic demand curve and can set its price (P) above marginal cost (MC) without losing sales.Syverson, C. (2019). Macroeconomics and Market Power. The Journal of Economic Perspectives, 33(3), 23-43. https://doi.org/10.1257/jep.33.3.23 This indicates that the magnitude of market power is associated with the gap between P and MC at a firm's profit maximising level of output. Such propensities contradict Perfect competition, perfectly competitive markets, where market participants have no market power, P = MC and firms earn zero economic profit. Market participants in perfectly competitive markets are consequently referred to as 'price takers', whereas market participants that exhibit market power are referred to as 'price makers' or 'price setters ...
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Oligopoly
An oligopoly (from Greek#REDIRECT Greek Greek may refer to: Greece Anything of, from, or related to Greece Greece ( el, Ελλάδα, , ), officially the Hellenic Republic, is a country located in Southeast Europe. Its population is approximately 10.7 million as of ... ὀλίγος, ''oligos'' "few" and πωλεῖν, ''polein'' "to sell") is a market structure Market structure, in economics, depicts how firms are differentiated and categorised based on the types of goods they sell (homogeneous/heterogeneous) and how their operations are affected by external factors and elements. Market structure makes it ... in which a market Market may refer to: *Market (economics) *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an island shared by Finland and Sweden Art, entertainment, and media Films *Market (1965 film), ''Market'' (1965 ... or industry Industry may refer to: Economics * Industry (economics) In macroeconomics, an ...
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