1
Q
profit maximising rule
A
produce where the mr is the mc
–> keep producing until the additional cost of producing a unit is greater than the profit it will bring
also the loss minimising rule
2
Q
price takers
A
sellers who have no influence over the prices and have to take whatever is set by the market
2
Q
shut down rule
A
Shut down producing when the selling cost is lower than the average variable cost
2
Q
Perfect competition
A
many small firms making the same product
3
Q
Mr. Darp
A
mr = d = ar = d
in market cost transfering over to the firm graph
4
Q
Allocative efficiency
A
P = MC where exactly the amount society desires is produced
5
Q
Productive efficiency
A
When goods being produced are P = Minimum ATC
AP Microeconomics
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