Production, Cost, and the Perfect Competition Model

Savings achieved by maintaining existing equipment longer.

Potential revenue from higher productivity due to better-trained employees.

The money spent on employee salaries during training sessions.

Increased efficiency and production from new machinery.

Agreements like these have little effect on individual companies’ decisions regarding pricing, given the inherent flexibility of personal branding and unique product offerings characteristic of this type of market structure.

They usually foster an environment where businesses become more aggressive in discounting and promotional tactics to counteract the rigidities introduced through such policy means, achieving better efficiencies of scale and resultantly benefiting the end-user.

Minimum advertised pricing helps ensure fair competition among retailers, essential to maintain stability and promote allocative optimization across the entire marketplace.

MAP agreements tend to raise retail prices above what would be set purely based on inter-firm rivalry, thereby negatively affecting allocatively efficient outcomes on a sector-wide basis.

The firm decreases production because higher quantities will lower market prices further.

The firm increases production as long as the new price is above its marginal cost curve.

The firm stops production until it can assess long-term trends in market demand.

The firm continues producing the same quantity since price changes do not affect perfect competitors.

Scarcity

Economies of scale

Price ceiling

Diminishing returns

Increased competition among employers leads them all paying wages equaling the initial monopsony wage rates pre-intervention.

Minimum wage has no impact as all employers were already paying above that threshold rate priorly instituted by law.

Higher wages lead to unemployment as employers hire fewer workers than before minimum wage was set.

Minimum wage causes perfectly elastic labor supply at the new minimum wage rate level.

Average receivable turnover.

Marginal Utility.

Average fixed costs.

Total profits.

Production at lowest cost per unit without considering sales volume or market conditions.

Achievement of break-even point with no regard for future growth or sustainability concerns.

Minimum level required to sustain operations while maximizing profits per selling price.

Maximum possible output ignoring market demand constraints and potential losses.

When total revenue equals total costs.

When average revenue equals average cost.

When marginal revenue equals marginal cost.

When marginal benefit equals average benefit.

Base decisions solely on maximizing each firm's individual utility without regard for competitors' actions.

Act as price-takers due to high competition between numerous firms in the market.

Engage in tacit collusion to increase market prices and restrict output collectively.

Set prices independently, assuming other firms’ responses will be negligible due to market size.

Marginal profit.

Average return on investment.

Gross earning potential.

Net income increment.